Auxiliary & Self Supporting Assessment Tiger Team
Summary & Recommendations
June 1, 2009
I.
EXECUTIVE SUMMARY
The Auxiliary & Self Supporting Assessment tiger team was appointed in December 2008 at the
request of the campus Financial Officers and Campus Budget Office. Its charge was to review
current cost recovery on sales and services by campus Auxiliary and Self Supporting operations
to ensure campus overhead costs are fully recovered. Team membership included
representatives from several Vice Chancellor units across the campus and is provided at the end
of this report.
Over a period of four months the team researched, reviewed, and discussed the current campus
cost recovery methods and policies for Auxiliary and Self Supporting activities, and surveyed
general practices at other UC and non-UC institutions. It is clear that Auxiliary and Self
Supporting activities have a significant and growing impact on the campus. For the 2007/08
fiscal year, Auxiliary and Self Supporting activities represented $1.1 billion, or almost 45%, of
total campus revenues. These activities have increased by 75% over the last 7 years, from a total
of $653 million in 2000/01.
There was consensus among team members that the campus should fully recover overhead costs
incurred on services provided to Auxiliaries and Self Supporting operations and sales by those
entities to the general public. Costing and pricing policies governing Auxiliary and Self
Supporting activities require that rates for sales to the general public recover applicable overhead
costs; activities are expected to “fully self support” without institutional subsidy. As a result of
the review, preliminary data suggests that the campus may not be fully recovering such overhead
costs. In summary, the review indicated that:
Current management of the administrative recharge rates can be cumbersome and labor
intensive, consequently, the rates have not been updated to reflect the level of services
provided by campus administrative units.
The administrative cost pool currently used to calculate overhead recovery is too narrow;
current practice only includes services provided by select Business Affairs units.
Several activities falling under the scope of current policy do not appear to be remitting any
campus overhead cost recovery. In fiscal year 2007/08, activities recommended for
additional review recorded $88 million in annual revenues.
The research and analysis conducted by the team indicates that there is opportunity for additional
recovery, however, the team did not have sufficient time to fully review and discuss the
recommendations contained in this report. Additional time is needed to comprehensively
analyze the impact on the Auxiliary and Self Supporting activities. Several recommendations
require further analysis before they can be fully adopted, therefore, it is recommended that sub
teams be formed to analyze and/or implement some of the immediate and short term
recommendations contained herein.
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Immediate Recommendations
1. Implement recalculated administrative recharge amounts effective FY 2009/10 using FY
2008/09 Auxiliary and Self Supporting activity expenditure levels.
2. Conduct a review of activitites classified as quasi-Auxiliary units to ensure that their facility
costs are not being subsidized by the campus. Activities housed in state supported space
must recover campus facilities cost by charging the full differential income rate on sales to
the general public and other non-university private entities.
3. Review by the Campus Recharge Rate Review of those activitites not currently remitting
overhead recovery. Also, review current procedures to ensure units compliance with
existing policy, including proper classification of such activities, confirmation that outside
rates include the recovery of applicable overhead costs and the review of
exception/exemption categories defined in PPM 300-40.
4. Conduct periodic audits of select activitites, to ensure that overhead recovery is being
collected and remitted according to campus policy.
Short-term Recommendations
1. Simplify the calculation of the administrative recharge rate. Leverage campus financial data
and process used by the Financial Analysis Office to negotiate research overhead rate to
simplify the calculation of the administrative recharge rate.
2. Standardize and automate the administrative recharge process similar to the automated
financial process now in place for campus research activity and overhead cost recovery.
3. Consider establishing a differential income rate using our calculated federal components, not
the campus negotiated components.
4. Review “Other Sources” and “Tuition and Fee” activities to determine whether current policy
applies to the collection of overhead recovery. Where current policy does not exist, examine
the appropriateness of such recovery and the impact on those activitites.
In closing, we want to thank all member participants of the Auxiliary & Self Supporting
Assessment tiger team. We recognize that participation in important efforts such as this is in
addition to normal daily work requirements. The active participation in researching and
interpreting policy, data analysis and participation in team discussions is much appreciated and
most critical in arriving at this team report.
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II.
INTRODUCTION AND PURPOSE
UCSD as a whole is experiencing significant budgetary challenges in the current and upcoming
years, as a result of a number of converging factors. Among others, this includes reduced state
general fund budgets; reinstatement of contributions to the UC Retirement Plan; growing
unfunded mandatory costs for health and welfare benefit costs; unfunded state enrollment,
utilities, and facilities maintenance; declining endowment values and operating payouts; and
slowing growth in federal basic research funding. As the campus confronts these compounding
budgetary problems, it must maintain priority on core academic enterprise, classroom teaching
and research laboratories. In so doing, a balanced multi-year approach is critical to the campus‟
ability to emerge from these difficulties and forge a stronger position over the upcoming
decades. An important component of the campus planning process is the work of tiger teams,
focused on:
Identifying and implementing immediate, mid, and longer-term tangible cost containment
and reduction measures;
Identifying and pursuing options for program consolidation & department restructuring that,
over time, results in reduced personnel costs;
Identifying opportunities and pursuing alternative revenue strategies.
The Auxiliary & Self Supporting Assessment tiger team was appointed in December 2008 at the
request of the campus Financial Officers and Campus Budget Office. Its charge was to review
current cost recovery on sales and services by campus Auxiliary and Self Supporting operations,
to ensure overhead costs are recovered and in alignment with services received – without
institutional subsidy. The review does not include sales and services to the campus by nonuniversity unaffiliated third party operators, nor internal campus recharge sales from one campus
department to another. The team is comprised of representatives from several Vice Chancellor
units and departments across the campus and specific membership may be found at the end of
this report.
UCSD‟s total revenues for the 2007/08 fiscal year were $2.5 billion, of which, Auxiliary and Self
Supporting activities represented $1.1 billion or almost 45% of total campus revenues. These
activities have increased by 75% over the last 7years, from a total of $653 million in revenues in
2000/01. Over this same period, total campus revenues increased by 57%, from $1.6 to $2.5
billion. Clearly, Auxiliary and Self Supporting activities on the campus are a significant and
growing component of total campus operations. (Appendix A)
Over a period of four months the team researched, reviewed, and discussed the current campus
cost recovery methods and policies for Auxiliary and Self Supporting activities, while surveying
practices at UC and non-UC institutions. To focus the work of the team, the following tasks
were identified:
Review UCSD‟s current methods, magnitude of support, and use of funds
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Define Auxiliary and Self-Supporting activities as well as campus administrative and
institutional support costs
Research other UC campuses‟ and other institutions‟ practices
Minimize negative consequences to the campus core mission
Make recommendations that consider the short and longer-term needs of the campus
III.
RESEARCH AND FINDINGS
Current Overhead Costing Policy
Auxiliary and Self-Supporting activities are, by definition, expected to „fully self-support‟ and
not receive institutional subsidy. Costing and pricing policies governing Auxiliary and SelfSupporting activities require that rates for sales to the general public shall recover applicable
overhead costs (PPM 300-40 V.A.2.d, Appendix B); comparable to direct costing and overhead
recovery on federal research activities. For Auxiliaries, campus cost recovery occurs largely by
way of an “administrative recharge” assessed on Auxiliaries‟ expenditures, and for SelfSupporting activity it occurs by way of charging a “differential income/recovery rate” on SelfSupporting revenues.
Administrative Recharge: The Administrative Recharge process is managed by Business
Affairs, and attempts to recover central administrative overhead costs from campus auxiliary
units. The current process involves calculating an overhead percentage derived by the periodic
review of services and transactions supporting auxiliary units. This overhead percentage is
applied to Auxiliary expenditures in an attempt to recover costs associated with certain
categories of administrative services:
Human Resources and Payroll,
Purchasing, Disbursements and Receiving,
Travel,
General Accounting, and
Cashier‟s Office.
Auxiliaries by definition should self-fund all direct operating costs including facility and
administrative expenses. Unit assessments are processed manually, on a monthly basis, and are
calculated on prior year expenditure levels. Funds collected via the administrative recharge
process are retained within Business Affairs to offset operating costs. A summary of the
methodology and use of these funds is provided in Attachment 1.
Differential Income/Recovery Rate: The Differential Income/Recovery process is
administered by the department responsible for the revenue producing activity with oversight and
reporting provided by General Accounting. Per campus recharge policy, most self-supporting
income producing activities (e.g. recharge departments with outside sales and services) must
recover campus overhead costs by way of a differential income/recovery rate. This rate is
similar in concept to that applied to federal research activity and negotiated with the Department
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of Health and Human Services (DHHS). The “differential rate” is driven by the current
negotiated research rate for the campus, less four components that have been determined not to
apply:
Equipment Depreciation,
Sponsored Project Administration,
Student Administration and Services, and
Library.
Differential income is calculated manually with final allocations processed no later than fiscal
year end. Income generated by this form of cost recovery is currently distributed as follows:
65% to, or as directed by, the Vice Chancellor responsible for the activity that generates the
overhead recovery
25% to, or as directed by, the Vice Chancellor Business Affairs
10% to, or as directed by, the Vice Chancellor Resource Management and Planning
The facility and administrative components of the current differential income rate and the
allocation of prior year recovery is provided in Attachment 2.
According to campus policy (PPM 300-40 V.A.2.d, Appendix B), exceptions to waive and/or
reduce the collection of differential income, while few in number, can be granted by the
Recharge Rate Review Committee. In order to obtain approval, one of the following conditions
must be met:
Off-Campus - If a sales/service activity is located in space that is not owned or maintained by
UCSD, an off-campus differential rate will be added to sales to the general public. If a sales
service activity is affiliated with the ship-use operation, with no space costs and all
departmental support costs factored into the charge rate, a ship use differential rate will be
added to sales to the general public.
Capacity Considerations - When a sales/service activity needs outside sales to attain/maintain
a desirable capacity that in turn keeps the sales/service cost low for University clients, and
when the standard overhead rate would price the service out of a competitive position.
Quid Pro Quo - When a particular client, or all clients, are providing something of tangible
value to UCSD that can be counted in lieu of full overhead on the sales/service charge.
Findings
Campus procedure for assessing the administrative recharge rates has included select services
provided by some Business Affairs units. The recharge rates have not included other General
Administration costs such as the Chancellor‟s Office, Campus Budget Office or Internal
Audit.
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The effort involved in maintaining and updating the calculations is labor intensive, and
alternative methods should be examined. Consequently, the rates should be updated relative
to the level of services provided by campus administrative units.
From 2003/04 thru 2008/09, administrative recharge rates were inadvertently assessed on
2000/01 Auxiliary expenditure levels. Beginning 2009/10, the current procedure is to charge
recharge rates based on prior year expenditure levels.
Assuming year-over-year growth for most of our Auxiliary units, billing in arrears results in
lower „real time‟ cost recovery for the campus.
Medical Center and Medical Compensation (a.k.a. Medical Group) activities have different
recharge rates. In recognition that the intent of the administrative recharge is to recover cost
of services that the campus provides, and not those services that the unit already funds as part
of its operations. Attachment 3 provides a comparison of the Medical Center rates.
The differential income rate is derived from the negotiated research rate for the campus. This
rate reflects “federal reimbursement caps” and overall rate negotiations made with the federal
government. Using the negotiated components as a starting point for setting the campus
differential income/recovery rate has the potential of discounting the campus cost recovery
from outside sales.
While Vice Chancellors units may elect to keep 65% of the differential income generated,
both Health Sciences and Academic Affairs have chosen to remit these funds to their
respective departments. Beginning fiscal year 2007/08, Marine Sciences changed their
differential income policy to retain 5% at the VC level.
Matrix of Income Producing Activities
A critical component of the review was to identify and classify the income producing activities
that would be impacted by the recommendations contained in this report. While the group
compiled an extensive list of activities, time constraints required that it narrow the review to six
general types of income producing activities. Attachment 4 defines these activities, provides
specific examples for each, and includes the 2007/08 revenue and cost recovery totals.
The group also discussed income producing activities classified outside of the Sales/Service
category that currently do not contribute to campus administrative costs. While not included in
the scope of this report, the following activities are suggested for future review:
Other Sources
Agency Funds
Campus Third Party Vendors
Recreation/Sports Programs
Other Outside Revenue Producing Activities
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Tuition & Fees Activity
Self Supporting Educational, Executive Programs
SOM Continuing Medical Education
Student Health Services
Findings
For those activities falling under the scope of this review, several do not appear to be
contributing to campus administrative overhead costs. Attachment 5 summarizes the
2007/08 Auxiliary, Self-Supporting, and Other Sources of revenue from which currently
there is no overhead cost recovery remitted.
Certain activities, such as Medical Group related charges, treated as quasi-Auxiliary units
and charged via the administrative recharge process may not be recovering campus facilities
costs. For example, if an activity is housed in state supported space, their facilities costs,
such as building depreciation, interest and operations and maintenance of plant (O&MP), are
funded by the State O&MP budget. For purposes of overhead recovery, application of the
differential income rate would be a way to recover both the administrative and facilities costs
from which their activities receive benefit.
Auxiliary Direct Administrative Costs
Our team included representation from two Auxiliary units on campus: Housing, Dining &
Hospitality (Housing) and Transportation Services (Transportation). Both units were asked to
provide a multi-year summary of direct administrative charges billed to their operations to
explore whether such charges represented a “double billing” of costs already recovered by the
administrative recharge process.
Findings
Data provided by both Housing and Transportation included all campus recharges billed to
their operating funds Attachments 6 and 6A. In certain cases, these costs appear to represent
normal operating costs of the activity and might not be treated as additional institutional
support (utilities, building maintenance, trash, etc.)
Certain services appear to be recovered by both the administrative recharge and direct
charges. For example, Purchasing services are recovered via the administrative recharge. In
addition, both Housing and Transportation are direct charged for purchasing staff and supply
costs for personnel assigned specifically to their organizations. Additional work, performed
by a successive sub team, is needed to examine whether these direct charges should be
treated as an operating cost of the activity or as institutional support costs recovered by way
of recharge.
Some costs appear to be partially recovered via the administrative recharge with larger direct
charges made to the Auxiliary units. For example, the administrative recharge recovers a
portion of administrative and supply/expense costs for the police department. In addition,
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both Housing and Transportation are responsible for funding a portion of the police
department operating budget. Additional work, performed by a successive sub team, should
seek to clarify what each charge is attempting to recover and determine if it makes sense to
bill police overhead costs via the administrative recharge while actual staff costs are direct
charged?
Where direct charges represent normal operating costs of an Auxiliary unit, the following
adjustments might need to be made to the administrative recharge calculation:
o If the charge is related to services specific to the Auxiliary unit (e.g. purchasing staff),
a direct charge could be made, however, it would be appropriate to exclude these
costs when calculating the overhead costs of the administrative unit (BFS
Procurement & Contracts).
o If the charge is related to generic services available to all Auxiliary units, it might be
more appropriate to eliminate the direct charge and fund the cost by way of the
administrative recharge process.
o In some cases, both charges may be appropriate; for example, police services specific
to the activity in addition to a general campus police presence.
Separate from direct charges for specific services, the Auxiliary units may also be providing
support in the form of space, administrative/data support and incidental supplies. Pending
additional review, it might be more appropriate to fund these costs via the administrative
recharge process by having the administrative units self-fund these costs.
Capital costs (e.g. water lines, displaced parking, etc.) and sustainability efforts appear to be
large commitments for both Housing and Transportation. Clarification is needed on whether
these costs represent campus initiatives or normal operating costs of the organization.
Facilities & Administrative Costs: General Administration Component
As a way to simplify the current administrative recharge process, the team proposed the
development of an auxiliary overhead rate based on the methodology used to negotiate campus
recovery with the federal government. Using existing campus financial data, the existing federal
overhead process is leveraged in two ways:
Development of an auxiliary overhead rate that only includes general administration cost that
are applicable to Auxiliary and Other Institutional Activitites. This requires the proration of
campus administration costs among various cost pools so that each activity is funding their
share of campus overhead.
Automating the administrative recharge process by copying the programming used to charge
overhead on federal funds. Automation will result in workload savings, additional recovery,
and eliminate the need to bill in arrears.
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Findings
While a significant amount of time was spent reviewing the overhead methodology,
additional time is needed to develop a rate that clearly and simply captures Auxiliary
administrative costs. While there was agreement on the methodology involved, the team
needs more time to conduct the in depth analysis necessary to produce a rate that could be
applied and compared to our current recovery model. In order to perform a more detailed
review, the simplification and calculation of the administrative recharge rate has been listed
as a short-term recommendation to be addressed in collaboration with one or more subteams.
The team agreed that automating the administrative recharge would result in significant
workload savings. While the existing automated federal process recovers campus overhead
on a regular basis, as federal expenditures are incurred; there was concern that using a similar
process would create hardship for activitites that experience fluctuations in their revenue
streams.
While the team agreed that the current process of reviewing transactions/services to calculate
the current administrative recharge rates would not be utilized under a new model, there is a
need to perform such a review to “test” the appropriateness of any new model. The old,
detailed calculation should be performed on 3-4 activitites to ensure that the level of cost
recovery resulting from a new model is in alignment with those services the units actually
receive.
UC and Non-UC Cost Recovery: Institutional Practices
Preliminary data gathered from campus financials indicated that UCSD‟s effective cost recovery
from Auxiliary and Self Supporting activities may be low relative to what would be expected per
campus policy. In addition to looking at internal campus methods, it was equally important to
survey other UC and Non-UC institutions to help inform the review of our own policies and
practices. Attachment 7 includes responses to a UC and a non-UC survey recently conducted.
Findings
From the responses compiled, both the UC and non-UC survey results suggest that UCSD
may be under-recovering Auxiliary and/or Self-Supporting administrative costs.
Many of the UC campuses include a broader group of revenue producing activities in their
administrative cost recovery. For example, assessments are applied to student recreation,
student health centers, printing and copying centers, and agency funds. The San Diego
recovery process does not assess these activitites.
The cost pool of both the UC and non-UC Institutions appear to include a broader category of
campus administrative costs. For example, in addition to services provided by Business
Affairs, the cost pools also include general administrative costs of the Chancellor‟s Office,
Budget and Analysis and VC Administration.
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Several of the non-UC campuses are using rates derived from their F&A rate negotiation
proposals as a means of consistently calculating and applying overhead recovery processes
across various activities, and in recognition of already accepted federal methods.
While both the UC and non-UC surveys provided good background information, they are not
a „comprehensive review‟ of either the methodologies deployed or the appropriateness of
such assessments. Instead, the responses are indicative of a range of practices employed by
other institutions. Further, they serve to inform possible improvements and/or changes to
local practices.
III. RECOMMENDATIONS AND POTENTIAL IMPACT
Immediate Recommendations
1. Implement the recalculated administrative recharge amounts effective FY 2009/10.
Bookstore, Housing and Transportation were billed for 60% of the 2008/09 recalculated
incremental in 2008/09. Because these increases are the result of activity growth, not a
recalculation of the administrative recharge, there was consensus to fully implement in FY
2009/10 Attachments 8 and 9.
2. Quasi-Auxiliary activities (e.g. Medical Group related activitites) assessed the administrative
recharge rate must demonstrate that the campus is not subsidizing the activity‟s space usage.
Recommend that General Accounting conduct a review of all activitites classified as quasiAuxiliary units to ensure that their facility costs are not being subsidized by the campus.
Activities housed in state supported space must recover campus facility costs by charging the
full differential income rate on sales to outside users. Going forward, the location of such
quasi-Auxiliary activitites should be considered prior to assigning a cost recovery method.
3. Recommend that the Recharge Rate Review Committee direct immediate attention to those
activitites which PPM 300-40 places under their purview and which are not currently
remitting overhead recovery. Going forward, enforce existing policy by properly classifying
such activitites and confirming that outside rates include the recovery of applicable overhead
costs. Based on preliminary data provided in Attachment 5:
o Medical Compensation and Other Sources make up 88% of the Auxiliary and Self
Supporting activity that does not appear to be collecting/remitting overhead recovery.
Specific attention should be directed to these areas.
o Specific attention should also be directed to individual activitites within the other
categories that generate revenue in excess of $500K annually.
o A listing of all remaining activitites should be provided to each respective Vice
Chancellor for review and/or comment.
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4. Recommend that the Recharge Rate Review Committee, Financial Analysis Office, and
General Accounting review the exceptions/exemptions in PPM300-40 for those activitites
currently not remitting overhead recovery.
5. Enforce campus policy on the collection and distribution of differential income. Recommend
that the Recharge Rate Review Committee, General Accounting and/or Audit and
Management Advisory Services (AMAS) conduct an annual audit of select activitites to
ensure that overhead recovery is being collected and remitted.
6. Recommend the formation of additional sub teams to address the short-term
recommendations identified in this report:
o Detailed review of administrative recharge rate
o Automation of administrative recharge and/or differential income recovery
o Review the current differential income rate with consideration given to the use of
calculated versus negotiated component rates.
Short-term Recommendations
1. Simplify the calculation of the administrative recharge rate. Leverage campus financial data
and process used by the Financial Analysis Office to negotiate research overhead rate with
the federal government to develop a rate that includes all campus administration costs
applicable to Auxiliary activities. Use similar method to determine rate for Medical Center
and Medical Compensation activitites. Resultant rates should reflect services provided by
the campus and not already self-funded by the activity.
2. Standardize and automate the administrative recharge process similar to what is now in place
for campus research activity and overhead cost recovery.
3. Consider establishing a differential income rate using calculated components, not negotiated
components (Attachment 10). Reduced rates as a result of federal negotiations should not be
applied to outside, non-federal users.
4. Review Other Sources and Tuition and Fee activities to determine whether policy should also
apply to the collection of overhead recovery. Where current policy does not exist, examine
the appropriateness of such recovery and the impact on those activitites.
Potential Impact
The recommendations of this report have primarily focused on the recovery of campus
administrative costs. Separate from campus overhead recovery, the impact of such changes on
the Auxiliary and Self-Supporting activitites should also be taken into account. While changes
to the current administrative recharge and differential income models are not included as
immediate recommendations, the following should be noted with the formation of sub-teams:
Auxiliary and Self Supporting activities need to be given time to assess the impacts and
respond to a new assessment.
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Consider the possible impacts on other revenue sources if rates are increased. For example,
will increasing the differential income rate force some activitites out of business and
indirectly affect the research programs that rely on those same services?
Significant changes may require that the incremental increase be implemented over a period
of time. For example, Housing rates are approved by student/faculty/staff advisory
committees on an annual basis. Significant increases will need to be included in these rate
proposals and may need to be phased in over several years.
Comprehensive input provided by team members in response to working drafts of this document
has been included for reference in Appendix C.
Tiger Team Membership
Sylvia Lepe-Askari, Campus Budget Office (Chair)
Bill Brophy, Financial Analysis
Mark Cunningham, Housing and Dining Services
Brian d'Autremont, Transportation Services
Clayton Egan, General Accounting
Ron Espiritu, VCHS
Debbie McGraw, Academic Affairs
Jane Milner-Mares, Family & Preventive Medicine
Mercedes Munoz, Campus Budget Office (Lead Staff)
Steve Relyea, Business Affairs
Deborah Seidle, VCHS
Julie Staffiero, General Accounting
Nick Webster, Research
Other participating staff
Alice Chen, General Accounting
Cynthia Harrison, Housing, Dining & Hospitality Services
Darryl James, Financial Analysis
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UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Administrative Recharge
Central Administrative Services
Rate
Human Resources and Payroll
Purchasing, Disbursements and Receiving
General Accounting
Travel
Cashier's Office
1.28%
0.56%
0.08%
0.90%
variable
Assessment of Cost Recovery
Attachment 1
Expenditure Base
Salary/Benefits
Supplies and Expense
Salary/Benefits, Supplies and Expense and Cost of Goods Sold
Travel (non-garage)
Based on services received (AR processing, returned checks, etc.)
2003/04
2004/05
$
51,000
859,000
285,000
394,000
18,000
160,000
2005/06
$
61,000
908,000
299,000
357,000
19,000
233,000
2006/07
$
70,000
930,000
312,000
360,000
21,000
222,000
2007/08
Academic Support (Educational Activities)
Auxiliary Enterpise
Medical Center
Medical Compensation
Other Sources
Student Tuition & Fees
$
46,000
809,000
271,000
375,000
16,000
160,000
$
72,000
951,000
326,000
372,000
22,000
250,000
Assessment Total
$
1,677,000
$ 1,767,000
$ 1,878,000
$ 1,915,000
$ 1,994,000
$
1,677,000
$ 1,767,000
$ 1,878,000
$ 1,915,000
$ 1,994,000
$
1,677,000
$ 1,767,000
$ 1,878,000
$ 1,915,000
$ 1,994,000
Allocation of Cost Recovery
Business Affairs (1)
Allocation Total
Notes:
1. Includes allocations to Business & Financial Services, Police and PPO Grounds.
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Differential Income
Attachment 2
Differential Income
Policy
Rate
% Rate
Differential Income Rate Components
Administrative
Departmental Administration
General Administration
Sponsored Project Administration
Student Administration & Services
Facilities
Building Depreciation
Building Interest
Equipment Depreciation
Library
Operations and Maintenance
Rounding
Rate
Allocation of Recovery Funds
Administrative Vice Chancellors
Business Affairs
Resource Management & Planning
16.80
6.50
-
37%
14%
-
5.00
4.00
13.00
(0.30)
11%
9%
29%
-1%
45.00
100%
2003/04
$
Subtotal
VC Responsible for Activity
Academic Affairs
Business Affairs
Health Sciences
Marine Science
Student Affairs
Subtotal
Allocation Total
$
495,000
197,000
692,000
309,000
83,000
479,000
694,000
1,564,000
2,256,000
2004/05
$
$
395,000
157,000
552,000
226,000
44,000
540,000
369,000
1,000
1,180,000
1,732,000
2005/06
$
$
544,000
236,000
780,000
210,000
37,000
684,000
900,000
1,000
1,832,000
2,611,000
2006/07
$
$
792,000
316,000
1,108,000
242,000
38,000
1,104,000
1,421,000
2,000
2,807,000
3,916,000
2007/08
$
$
538,000
214,000
751,000
345,000
55,000
436,000
1,163,000
2,000
2,001,000
2,752,000
Notes:
1. Differential Income is distributed as follows:
65% to, or as directed by, the Vice Chancellor responsible for the activity
25% to, or as directed by, the Vice Chancellor Business Affairs
10% to, or as directed by, the Vice Chancellor Resource Management & Planning
2. For activitites charging an overhead rate in excess of the standard rate, the entire excess is distributed
to the Vice Chancellor responsible for the activity. Where approval has been granted to charge a reduced overhead rate,
the income will first be distributed to the Administrative Vice Chancellors, with the balance, if any, distributed to the Vice
Chancellor responsible for the activity.
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Medical Center/Medical Compensation Negotiated Rates
Medical Center Assessment
Human Resources
Payroll
Purchasing, Disbursements and Receiving
General Accounting
Travel
Cashier's Office
Medical Compensation Assessment
Human Resources
Payroll
Purchasing, Disbursements and Receiving
General Accounting
Travel
Cashier's Office
Campus
Rate
Medical Center
Rate
0.56%
0.08%
0.90%
variable
0.04%
0.10%
0.00%
0.01%
3.76%
0.00%
Campus
Rate
Medical Comp
Rate
1.28%
1.28%
0.56%
0.08%
0.90%
variable
0.06%
0.17%
0.56%
0.07%
0.52%
variable
Attachment 3
Difference
-1.15%
-0.56%
-0.07%
2.86%
n/a
Difference
-1.06%
0.00%
-0.01%
-0.38%
n/a
Notes:
1. Human Resources and Payroll rates are calculated separately.
2. Human Resources rates based on flat negotiated charge. For comparison purposes, amount has been converted to
percentage of payroll/benefit costs.
3. Payroll rates based on average historical payroll percentages for payroll recharges from FY 1992/93 thru 1994/95.
4. Travel rates based on average historical travel percentages for travel recharges from FY 1992/93 thru 1994/95.
Source Data: FY 2003/04 Calculations for Medical Center and Medical Group Recharge - General Accounting Calculations
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Matrix of Sales/Service and Other Income Producing Activities
2007/08
Revenue
$144 M
2007/08
Recovery
$951 K
% Recovery
.66%
Administrative
Recharge
(negotiated rate)
$732 M
$326 K
.04%
Administrative
Recharge
(negotiated rate)
Differential
Income
$195 M
$372 K
.19%
$556 K
$12 K
2.08%
Testing services, computer Combination of
services and illustration
revenue and
services
recharge
Differential
Income or
administrative cost
recovery
$29 M
$2.7 M
9.15%
Facility rentals, services
offered at student health
centers, and departmental
conference programs.
Differential Income
or administrative
cost recovery
$30 M
$180 K
.59%
Activity Type
Auxiliary
Enterprise
General Definition
An activity which provides, at approved
rates and on a regular and continuing
basis, goods or services primarily to
individual students, faculty, staff and,
incidentally, to the general public.
Some Examples
University Bookstore,
Housing and Dining
Services, and Parking
Services
Types of Income
Primarily
revenue;
incidental
recharge income
II.
Medical
Centers
Hospital-based and ambulatory patient
care services, teaching and clinical
research.
Urgent Care, surgical
facilities, and patient beds
Revenue
III.
Medical
Compensation
Patient visits and in/out
patient services
Revenue
IV.
Service
Enterprise
Patient Care and Clinical Services (aka
Medical Group). Patient fees generated
by faculty physicians.
An activity which provides, at approved
rates and on a regular and continuing
basis, goods or services to a wide variety
of campus departments. Typically a
service enterprise will have only
incidental sales to individuals.
Imprints, Storehouse, and
Telecom Services
Primarily
recharge;
incidental
revenue
V.
Academic
Support (aka
Educational
Activities)
Any activity organized within an
academic department which provides, at
approved rates and on a regular and
continuing basis, goods and/or services
primarily to that and other academic
departments on the campus.
VI.
Other Sources
Any recharge or other income producing
activity which does not fall naturally into
any of the other classifications.
I.
Applicable
Administrative
Recovery Policy
Administrative
Recharge
Attachment 4
Combination of
revenue and
recharge
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Activitites Without Overhead Contributions
2007/08
Revenue
Academic Support
Student Affairs
Academic Affairs
Business Affairs
Health Sciences
Marine Sciences
$
Auxiliary Enterprises
Student Affairs
Business Affairs
Medical Compensation
Health Sciences
Other Sources
Director Of Medical Center
External Relations
Student Affairs
Resource Management & Planning
Academic Affairs
Business Affairs
Health Sciences
Marine Sciences
Services Enterprises
External Relations
Business Affairs
Total Revenue
$
% Total
4,271,000
2,492,000
133,000
2,271,000
42,000
9,209,000
10.5%
432,000
48,000
480,000
0.5%
51,593,000
58.6%
Attachment 5
Major Activitites (Revenue > $500K)
Recreation Income
115,000
2,764,000
6,540,000
7,235,000
2,572,000
5,265,000
1,321,000
434,000
26,246,000
29.8%
6,000
442,000
448,000
0.5%
Other Service Agreements
Student Health Services
Property Income
Parking Fines
87,976,000
Notes:
1. Above revenues did not record allocation of overhead recovery either by way of the
Administrative Recharge or Differential Income.
2. The Other Sources category appears to include both revenue subject to and exempt from overhead recovery.
Additional research will need to be done to properly classify these activitites.
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Auxiliary Enterprises - Direct Administrative Costs
Attachment 6
Administrative Recharges & TS Funded Items with Campus Benefit
Transportation & Parking Operations
6/30/07
1,316,898.57
Benefits
6/30/06
1,096,223.22
Telcom
176,545.15
635200
635210
Utility Services-Gen
Utilities-Electricity
226,342.71
81,181.16
636057
638174
637258
637263
637266
637275
637302
637327
637330
637383
637405
637459
637462
637463
637485
637607
637608
637611
637627
637639
Bursar's-Id Cd.Recharge
BKS Cameras
Campus Adm Recharge
Systemwide Adm Recharge
Med Ctr Other-Purch Service(Security)
Media Serv Recharge
UNEX Recharge-Class Fee
ACT Misc Recharge Serv
Department Cost Dist Recharg
Publications-Art Work Recharge
Cr.Cd.& Bk Charges
HR Backround Ch Recharge
Personnel Recharge-Job Adv
Adv-Guardian Recharge
Personnel Training Class Recharge
SBS Billing Stmt Proc Charge
ACT Misc Network Recharge
Computer Output Services
ACS Net OPS Misc Network SVCS
ACS Software SVCS Recharge
540.00
24,000.00
217,496.64
11,786.69
217,929.95
4,601.85
767.50
0.00
0.00
6,760.13
2,266.00
3,228.10
12,085.10
760.00
661.00
431.22
0.00
0.00
512.50
0.00
345.00
71,692.23
223,008.86
20,488.81
360,684.80
4,142.50
0.00
17,400.00
7,483.62
2,245.43
37,681.75
2,655.80
12,772.67
9,415.00
4,667.00
217.83
0.00
4,308.03
1,225.00
40.06
720.00
51,244.32
228,521.04
11,762.46
350,151.50
9,792.98
265.50
5,800.00
1,456.18
0.00
26,199.32
2,779.00
17,068.73
6,972.80
8,462.00
0.00
1,093.75
10,768.99
468.75
360.14
637120
Bldg. Maint.-Fac.Mgmt Rechar
1,055,214.71
1,537,825.86
826,696.05
637150
Purchased Maint.Bldg.
3,230.00
244,909.13
135,018.74
637162
Repairs & Maint-Bldgs & Grounds
111,162.26
133,287.14
114,256.26
637164
Alterations-Bldg
30,880.80
30,880.80
30,880.80
637446
AVC A&PS Admin Serv. Recharge
455,656.44
684,668.23
687,566.16
652300
Fleet
1,247,771.65
1,491,312.50
1,792,518.62
637276
637366
637367
637368
Campus Police
Purchased Sec.Serv.
Police-Alarm Recharge
UCSD Police-Cash Del Recharge
403,425.13
95,563.96
1,465.00
1,761.20
494,860.14
13,217.11
1,490.00
1,413.00
518,110.44
396.00
1,533.75
1,198.80
636506
EH&S (636506, 637580, 637583)
10,400.64
24,918.39
19,690.32
Insurance
72,700.81
97,340.71
74,002.44
Imprints
34,573.30
47,846.03
60,751.05
149,156.56
242,536.20
227,978.41
1,023.49
7,642.00
0.00
0.00
226.79
180.52
0.00
7,788.83
17,813.20
5,736.38
0.00
0.00
999.07
4,899.09
0.00
5,292.95
0.00
0.00
636055
Human Res.-Temp Employment Services
634039
637103
637105
634107
634108
634156
Telecomm Offnet Recharges
Tel Equip-Ericsson-Hosp
Tel Install - Order Charges
Tel-Med Ctr Network Sup Svc
Tel Recharge-Toll-Hosp
Telephone Message Units
637247
Acctg.Recharges-General Acctg.
Mail
256,887.18
307,523.87
502,215.29
9,072.80
166,394.80
22,765.59
6/30/08
1,482,891.25
6/30/09
154,473.91
189,160.39
510,980.25
31,338.41
201,441.75
53,446.59
874.00
437.00
437.00
7,525.47
8,202.70
14,563.93
5,172.00
59,186.38
60,707.03
0.00
0.00
1,187,691.20
254,888.34
521,238.99
11,191.11
Other:
Flex Car
MTS & NCTD
ADA(net)
0.00
0.00
9,582.66
363,483.00
277,137.17
332,679.72
Campus Capital Projects-Road Work
0.00
0.00
200,000.00
Campus Capital Projects-Town Center
0.00
0.00
0.00
143,000.00
Campus Capital Projects-Shuttle Turn-outs
0.00
0.00
406,000.00
188,000.00
Campus Capital Projects-Gilman Transit Hub
0.00
0.00
163,741.00
Campus Capital Projects-East Campus Signage
0.00
135,340.00
0.00
Transit Pass Subsidy
25,000.00
TBD
Source: Data provided and presented to Auxiliary & Self-Supporting Assessment Tiger Team by Transportation Services March 13, 2009
June 1, 2009
Attachment 6A
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Auxiliary Enterprises - Direct Administrative Costs
HDH Financial Commitments/Impacts that do not show up as Actual Admin Recharges
Department
Item
Parking
Parking
Parking
ACT
Colleges/ Staff Assoc.
Campus
Campus
Campus
Campus
Campus
VCSA/Colleges
2005-06
Reimbursement for displaced parking spaces - North
Campus 1
Reimbursement for displaced parking spaces - Health
Sciences
Reimbrusement for displaced parking spaces - NC
Campus
Agreement with ACT to do annual Data upgrades
Collect and distribute all vending income annual
Wedge IV Funding
Upgrade to North Campus Pump Station (originally
installed by HDH) to meet neighborhood needs
Extending campus recycled water loop to north campus
properties
Value of providing paid for existing HDH building for
ECEC program growth at current site
Value of providing paid for additonal existing 2 buildings
for ECEC program growth at current site
Residence Life Program Funding (95% of total costs)
TOTAL
2006-07
2007-08
07/08 - 01/31/09
2009-10
1,817,640.00
1,817,640.00
1,315,960.00
89,378.00
74,918.00
500,000.00
59,345.00
285,120.00
Total
1,575,520.00
500,000.00
38,255.00
1,315,960.00
500,000.00
1,575,520.00
1,500,000.00
261,896.00
785,120.00
350,000.00
350,000.00
500,000.00
780,000.00
780,000.00
340,000.00
340,000.00
740,000.00
3,571,724.00
3,751,724.00
4,081,869.00
4,006,622.52
3,661,102.00
3,826,642.00
6,743,974.00
8,556,357.52
2,090,000.00
740,000.00
15,411,939.52
24,878,075.52
FOUR YEAR ANALYSIS CAMPUS RECHARGES: FY2005 TO FY2009
FY05_06
FY06_07
FY07_08
07/08 - 01/31/09
TOTAL
TRASH
UTILITIES
GROUNDS
EH&S
BUS
CONNECTIONS-DATA
CONNECTION-CABLE
PURCHASING
SECURITY
POST OFFICE
ACT RECHARGES
INFO SYS ASSESSMENT
GRAND TOTAL:
286,486.59
4,279,048.56
1,187,740.57
280,643.31
102,774.00
460,230.00
470,677.20
223,309.62
947,823.00
311,329.00
28,380.00
85,112.00
8,663,553.85
298,541.48
4,228,406.78
1,083,438.40
307,105.85
152,500.00
969,384.00
470,677.20
235,415.42
915,393.16
315,011.10
26,015.00
85,112.00
9,087,000.39
404,277.15
4,635,909.44
1,083,103.04
270,720.14
222,450.00
1,463,616.00
470,677.20
335,038.20
1,128,747.02
364,250.00
30,745.00
85,112.00
10,494,645.19
240,689.19
2,148,299.42
588,435.62
172,267.09
171,288.00
944,300.00
281,384.06
171,192.06
1,091,260.50
299,965.50
9,460.00
85,112.00
6,203,653.44
1,229,994.41
15,291,664.20
3,942,717.63
1,030,736.39
649,012.00
3,837,530.00
1,693,415.66
964,955.30
4,083,223.68
1,290,555.60
94,600.00
340,448.00
34,448,852.87
Source: Data provided and presented to Auxiliary & Self-Supporting Assessment Tiger Team by Housing, Dining & Hospitality March 13, 2009
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries Self Supporting Assessment Tiger Team
Administrative Cost Recovery Survey - UC Institutions
Campus
Who is being assessed?
What is the methodology?
Berkeley
Units w/ external sources of
revenue
Any self-supporting activity
4% of revenue collected
Davis
What Admin Units/ Services are
included?
3% of revenue
What happens to the funds
collected?
Chancellorial funds that maybe
allocated in budget process
Assist with budget reductions
Attachment 7
Are changes being planned or underway?
Yes, potential extension to Hospital currently
not included.
Looking at optional methodologies primarily
assessing income rather that expenses and
also looking at the land value approach
Irvine
Auxiliaries & Service Enterprises: Cost to be recovered divided by total
Bookstore, housing & dining,
campus expenditures times adjusted
hospital/clinics,
expenditures of assessed units
parking/transportation, student
recreation, University Ctr, Food
Svs, Events Ctr, Conference Svcs,
Garage/Fleet Svcs, Mail Div,
Network & Computing Svcs,
University Extension, Summer
Session, Executive Degree
programs.
Generally include: Accounting, purchasing, Budget reductions and budget
payroll, HR, benefits, equipment
process
management, Chanc Office, EVC office,
Acad Senate, all Vice Chancellor Offices,
OEOD/Ombuds, Envir Plnng, Budget Office,
Asset mgmt, Capital Plnng, C&G Admin,
Audit, Controls, Cashier, Collections, Adcom
Svcs, Central Records, EH&S, Employee
Assistance, Receiving, Police, Contract
Svcs -- some modification for the Med Ctr.
Los Angeles
Entities with an annual income of
$100K+ (generally excluding
academic depts). Have over 600
activities. Looking to expand
recovery 7/09 to outside sales -going to Recharge Committee this
Spring.
Methodology is based on the individual
Admin Units service (ie. EH&S = hours,
Accounting = transactions, etc.)
Rent is included in certain recharges
EH&S, Receiving, Procurement, HR, Mail
Svcs, Ombuds Office, Legal Affairs, Corp
Financial Svcs are charging
(authorized – Collections, Audit, Property
Mgmt, Cashier, Business Svcs, Staff
Personnel, Insurance/Risk Mgmt, Police,
AIS & Financial Training)
Recharge income is retained by the
Administrative Vice Chancellor.
Recharge income and its proposed
usage is reported to the Chancellor
during the budget process.
Riverside
Entities with an annual income of
$50K+
Methodology varies based on the
individual Admin units service
Select ABP units and select VCA units
San Diego
All large Auxiliaries
Methodology in place for many years,
and attempts to assign costs based on
level of effort provided by some Admin
Units
Payroll, HR, Disbursements, Purchasing,
Receivables, Travel, Accounting, Cashier,
Student Billing Svcs
Santa Barbara
Most self-supporting units with
annual income of $50K+
Currently 1% of revenue plus separate Accounting, Equipment Management, HR,
MOUs for other services
Procurement, Risk Mgmt, Cashiers,
Receiving, Safety..
Discretionary funds for Chancellor
Yes, different methodologies are being explored
that may be utilized to provide
support to the central Admin units
Admin Units get the recharge income Yes, but have not decided on a new
methodology. Will explore assessment rates
based on revenue levels, total campus Admin
costs, and type & level of support auxiliary units
are receiving.
Chancellor receives a set amount and Yes, looking at increasing the assessment rate
the rest goes back to Admin units
to 4% and expanding the fund sources to
include campus based fee. On hold til 4/15/09;
and delay inclusion of campus based fees.
Santa Cruz
Auxiliary Services – Bookstore,
Parking, Housing & Dining, Guest
Suites, Summer Session, Coffee
Shops, Conf Office*, UNEX*,
MBEST*
Assessment Rate = Based Exp of
Institutional Support – Administrative
Central Svcs/Total Campus Exp (less
Services and other support services
financial aid and Central Service totals)
Yes, policy was created over 30 years ago and
thresholds need to be updated and possible
expansion to a internal/ external dual-rate
structure to allow market-based pricing to
outside customers.
Budget Cuts, budget process
Assessment Rate (* 1/3 rate) is
multiplied by Auxiliary Adj. Expenditures
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Administrative Cost Recovery Survey - Non UC Institutions
Attachment 7A
Our campus is trying to mitigate the budget cuts we expect from our state, by
ensuring that all fund sources contribute proportionately to campus core institutional
support functions from which they derive benefit.
Our Approach includes the review of current administrative recharges and other
assessments on auxiliary and self-supporting activities, to ensure that costs recovered
are proportional to services received. We are also reviewing charge rates for sales or
services to the general public, to ensure that they recover campus overhead costs.
We want to learn about and benefit from the efforts in this area at other institutions. I
would appreciate it if you will complete and return the brief survey below. I will share
the combined results with all respondents.
1.
Are your Auxiliary/Other Self Supporting functions (like hospital if relevant) an
integral part of campus?
a. Yes__
b. No__
2.
If not, what is their legal and financial structure?
a. 501c(3)__
b. Other (Please list)_______________________
3.
If not, do they contribute financially to the main campus?
a. Yes__
b. No__.
c. If yes, how?________________________________
4.
What campus auxiliaries, departments or activities do you assess for university
administrative and/or infrastructure? Check all that apply:
a. bookstore__
b. housing & dining__
c. hospital/clinics__
d. parking/transportation__
e. student recreation__
f. administrative computing/telecommunications__
g. other (list)_________________________________________________________
5.
What methodology is used for the assessment? Please provide order of magnitude
where possible (i.e. X% of total campus expenditures or revenues, or contribute $Y
million per year)
_________________________________________________________________________________
__________________________________
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Administrative Cost Recovery Survey - Non UC Institutions
6.
Attachment 7A
What campus institutional support functions/services/costs are included in
arriving at rate used for recovery? Check all that apply:
a. accounting__
b. purchasing__
c. payroll__
d. HR__
e. physical plant services__
f. benefits office__
g. equipment management__
h. facility/capital infrastructure/space rental (if housed off campus)__
i. other (please
list)___________________________________________________________
How often is your methodology adjusted and what ‘consultation process’ is used?
_________________________________________________________________________________
__________________________________
7.
8.
Is anyone in the process of or planning to make changes? If yes, what might those
be?______________________________
9.
How is the assessment income used by the
campus?_____________________________________________________________________
10.
Can this info be found online? If so, please provide site
address._________________________
11.
Who should I contact for follow-up questions or
clarifications?_______________________________________________________
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Administrative Cost Recovery Survey - Non UC Institutions
Are Auxiliary/Other Self
Supporting functions an
Institution
integral part of campus?
Virginia, University of a) Yes - Auxiliary, b) No Hospital. Our hospital is a
separate state agency with its
own financial systems, but colocated. We are mandated to
combine their financial
statements with ours (and
another state agency which is
a small liberal arts college) to
report as one consolidated set
of statements. Yes, hopitals
contribute financial to main
campus.
Colorado, University of Yes
Colorado, University of Yes, service centers, 19designated accts charging
fees, & auxiliaries
Washington,
University of
Yes
Nebraska, University
of - Lincoln
Yes
What campus auxiliaries, departments or
activities do you assess for university
administrative and/or infrastructure?
If yes, how?
We charge them for administrative support Bookstore, housing & dining, hospital/clinics,
using indirect cost study allocation
parking/transportation, student recreation,
methodology and Facilities Management administrative computing/telecommunications
charges them directly through their costbased rate structure for utilities,
maintenance, custodial services, etc. Our
Police department charges the Hospital
for the personnel that work there and in
addition when we do our indirect cost
study if there is support provided from the
central accounts then a portion of those
costs are allocated to the Hospital.
Bookstore, housing & dining, hospital/clinics
(student clinic), parking/transportation,
student recreation, administrative
computing/telecommunications, Athletics,
Internal Service Centers, Printing & Copying
Centers, Agency Fund (half rate), Interest and
Renewal & Replacement accounts for auxiliary
activities
What methodology is used for the assessment?
(Provide order of magnitude where possible)
Auxiliaries (bookstore, housing, dining, P&T, athletics,
student health, child care center, University Press,
escort service, student union, intramurals, radio
station): currently 6.5% of fiscal year expenses,
based on a bi-annual indirect cost study; Voice
Communications, Printing & Copying: 1% of budgeted
expenses
GAR(General Administrative Recharge) = F&A GA
Cost Pool with some adjustments as a percentage
of total operating expenses with some
adjustments. GIR(General Infrastructure Recharge)
= The cost of grounds, lighting, sign, street,
sidewalk, bikway & shelter maintenance, flood
control (infrastructure costs not directly charged
to auxiliaries) attributable to the total campus
space that auxiliaries occupy as a percentage of
total auxiliary expenditures
Housing & dining, parking/transportation,
Admin fee of 3.25% of operating expenses, which
student recreation, service centers charging for exclude capital expenditures, is assessed to nonservices provided to external entities.
auxiliary self-supporting accounts and auxiliary
accounts. Central administrative costs are roughly
5-6%, but the rate has been reduced by the interest
earned on balances in these accounts, which is
kept centrally. The fee will generate about $7.5
million for fiscal year 2008-09. A 26.5% surcharge is
assessed on external user rates for services provided
through our service center accounts. The 26.5%
institutional surcharge represents facilities and central
administrative costs that are not currently charged to
service centers or included in their rates to internal
users. Examples of facilities costs are utilities,
custodial, and building depreciation. Examples of
central administrative costs are for accounting, payroll,
personnel, and purchasing services. Application of the
institutional surcharge ensures that external customers
pay for these costs and are not subsidized by the
institution
Housing & dining (student housing and student We assess overhead as a percentage of external
dining are exempt from overhead, but
revenue received. The standard on-campus rate is
overhead is charged on retail food services), 15.6%, while the off-campus rate is 5.92%
hospitals and clinics are charged directly for
facilities and administrative costs and as a
result are not assessed additional institutional
overhead, parking/transportation, administrative
computing/telecommunications, self-supporting
educational programs and services on campus
such as the copy center are assessed
institutional overhead at a standard rate. Other
major programs, such as Intercollegiate
Athletics, are assigned a lower overhead rate
reflective of their partial direct payment of
facilities and administrative costs.
Bookstore, housing & dining, parking, student 5% of revenues, excluding student fees
recreation, administrative
computing/telecommunications, Athletics,
Museums, Student Unions, Health Center
What campus institutional support
functions/services/costs are included in
arriving at rate used for recovery?
Accounting, purchasing, payroll, HR,
benefits office, equipment management,
President's Office, Diversity Office, VP/COO
Office, Budget Office, a portion of
Development Office, General Counsel's
Office, Treasury Office, Major Events Office,
Board of Visitors, Information Technology
Accounting, purchasing, payroll, HR,
benefits office, all other GA offices included
in the F&A Cost pool i.e. Chancellor,
Provost, VC Administration, Budget and
Analysis, Ombudsman. Mailing Services,
charges for University-wide System
Administration and Statewide Indirect Cost
Allocation
Accounting, purchasing, payroll, HR,
physical plant services, benefits office,
equipment management, facility/capital
infrastructure/space rental.
Attachment 7B
How often is your methodology adjusted
and what 'consultation process' is used?
Every other year. Auxiliary rates are
calculated using a state-mandated process.
Hospital rates are negotiated annually,
while the allocation rates are adjusted biannually.
The methodology for the GAR rate has
been changed once since it was instituted
in 1978. The major auxiliary managers were
consulted during the entire change
process. The GIR rate was instituted in
1993 and has never been changed from the
original methodology. Rates are
calculated annually by the accounting
office and reviewed by the budget office.
Specific new or one-time items may be
excluded if they do not benefit auxiliary
operations.
The 3.25% administration fee was
increased from 2.75% to 3.25% in 2007-08.
Increases in the rate are approved by the
University Budget Committee. The
institutional surcharge account on external
sales by 18 service center accounts has not
changed since it was implemented, which
has been at least 10 years.
Is anyone in the process of or
planning to make changes? If yes,
what?
Information Technology and
Communications is planning on
changing from a per telephone line
charging structure to a per FTE
charging structure. The University
Architect's Office is currently
considering charging capital projects
for their services, but this is still very
up in the air as I have voiced CAS
concerns about such a plan.
How is the
assessment income
used by the campus?
It goes into a central
source of funding for
administrative
departments and
expenses
None anticipated
Becomes part of the
campus general
operating budget i.e.
not earmarked for any
particular operations.
Currently we are still trying to
To fund central
implement consistency and
administrative and
understanding from the
facilities costs.
departments/unit on campus on their
roles and responsibilities associated
with managing service centers. We
are working on a retreat for our
Employee and Campus Services unit
and will use that as our basis to
develop training for the entire
campus.
Accounting, purchasing, payroll, HR,
physical plant services, benefits office,
facility/capital infrastructure/space rental
The last adjustment was made in 2003.
We are considering re-evaluating the
Fortunately, the method of assessing
current overhead rate.
overhead on revenus is inherently scalable
and does not require frequent adjustment.
Nominal fee to cover a small portion of
administrative expenses
We have used the same rate for many
years, currently under review.
The overhead
collected is used to
offset the cost of
providing facilities and
administrative services
to self-sustaining
programs.
Switch from revenue base to expense Distributed at
base and expand population beyond Chancellor's
auxiliaries.
discretion.
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Administrative Cost Recovery Survey - Non UC Institutions
Institution
Are Auxiliary/Other Self
Supporting functions an
integral part of campus?
Georgia Tech
Yes
Housing & dining, hospital/clinics,
parking/transportation, Georgia Tech Research
Institute (GTRI), all other auxiliary units
(stores/shops - other then bookstore) beginning
FY09
For GTRI - costs are accumulated for applicable
Accounting, purchasing, payroll, HR,
administrative units and allocated to GTRI based on
benefits office, equipment management,
various factors (#POs, #accounts, headcounts, square facility/capital infrastructure/space rental
ft, etc.) (see attached executive summary)
For Auxiliary Units - charge first assessed during
FY09 and FY10 based on Auxiliary Enterprises
percentage of G&A (including Executive Mgmt)
expenses allocated to the OIA cost pool in the GIT
F&A Rate Study. FY2011 rates may be computed
using a methodology similar to GTRI (as noted above).
This is now being determined.
Oregon State
University
Yes
Housing & dining, parking/transportation,
student recreation, all auxiliaries are assessed
an administrative fee, including athletics,
student health services, student center
Assessment is % x expenditures of previous fiscal
year.
Georgia, University of
Yes
Bookstore, housing & dining,
See attached file
parking/transportation, Auxiliary Student Health
Center
Accounting, purchasing, payroll, HR,
physical plant services, benefits office,
equipment management, facility/capital
infrastructure/space rental (housed off
campus)
Calculated and assessed annually based
on prior fiscal year.
Anonymous
Yes
Housing & dining, parking/transportation,
printing services, athletics
Accounting, purchasing, payroll, HR,
physical plant services, benefits office,
equipment management, facility/capital
infrastructure/space rental, IT internal audit
bursar's registrar, travel.
Every 4 years or so; will now do it every 3
years. Meet with housing/dining and
athletics, then with transportation to fine
tune the assessments
If yes, how?
What campus auxiliaries, departments or
activities do you assess for university
administrative and/or infrastructure?
What methodology is used for the assessment?
(Provide order of magnitude where possible)
Utilities based on asf, others based on effort,
interviews, etc.
What campus institutional support
functions/services/costs are included in
arriving at rate used for recovery?
Attachment 7B
Is anyone in the process of or
How often is your methodology adjusted planning to make changes? If yes,
and what 'consultation process' is used? what?
For GTRI - annually; for Auxiliary Units - to
be determined annually beginning FY2011.
FY2009/10 based on negotiated/discounted
amount applied to charge amount
determined about (#6)
Accounting, purchasing, payroll, HR,
Reviewed annually by VP and Associate
benefits office, President, VP for Finance,
VP for Finance with heads and business
central computer support and other services managers of the auxiliaries.
not direct charged to the auxiliary.
How is the
assessment income
used by the campus?
Yes for Auxiliary Units. We are
General Operations
establishing a charge-out
methodology for the charge and
educating Auxiliary Unit management
as to its need and basis.
No plans to change at the moment.
Put in the general fund
budget allocation
process to appropriate
support units.
General funds
Not at this time
Becomes part of
general fund
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Actual Expenditures
(excl. Medical Center Medical Compensation)
2003/04
Other Sources-Other
Student Affairs
A. S. Class Materials
A.S. Lecture Notes
Guardian Advertising
Price Center Rental
$
Academic Support
Health Sciences
Psychiatric Clinical Services
Marine Sciences
Stephen Birch Aquarium Museum
Auxiliary Enterprises
Business Affairs
Bookstore
Day Care Center
Housing, Dining & Hospitality
Transportation Services
Marine Sciences
SB Aquarium Museum Bookstore
Student Affairs
Bike Shop
Grove Cafe
Muir College Sundry Shop
Price Ctr Gameroom
Sports Facilities Concessions
Student Tuition & Fees
Academic Affairs
Summer Session
UNEX Fee Income
Health Sciences
OCME General Courses
Total Expenditures
363,000
108,000
292,000
535,000
1,298,000
2004/05
$
315,000
107,000
203,000
129,000
754,000
Attachment 8
Actual Expenditures (1)
2005/06
$
372,000
119,000
238,000
323,000
1,052,000
% Change
2006/07
$
467,000
112,000
264,000
435,000
1,278,000
2007/08
$
448,000
146,000
334,000
149,000
1,077,000
23%
35%
14%
-72%
-17%
3,726,000
3,787,000
3,408,000
3,995,000
4,373,000
17%
2,684,000
6,410,000
2,683,000
6,470,000
2,823,000
6,231,000
3,378,000
7,373,000
3,492,000
7,865,000
30%
23%
21,617,000
1,550,000
40,009,000
6,773,000
23,107,000
1,743,000
45,165,000
7,379,000
24,566,000
1,764,000
49,217,000
8,921,000
27,231,000
1,930,000
54,921,000
11,479,000
28,329,000
2,041,000
63,834,000
9,145,000
31%
32%
60%
35%
996,000
1,022,000
1,006,000
1,027,000
1,018,000
2%
192,000
325,000
130,000
25,000
228,000
71,845,000
214,000
259,000
115,000
33,000
279,000
79,316,000
204,000
260,000
154,000
26,000
278,000
86,396,000
194,000
217,000
152,000
27,000
306,000
97,484,000
225,000
178,000
198,000
23,000
326,000
105,317,000
17%
-45%
52%
-8%
43%
47%
334,000
20,354,000
3,951,000
23,969,000
3,812,000
22,557,000
5,684,000
23,509,000
6,785,000
25,826,000
1931%
27%
3,281,000
23,969,000
3,989,000
31,909,000
4,128,000
30,497,000
5,653,000
34,846,000
4,417,000
37,028,000
35%
54%
118,449,000
$ 124,176,000
151,287,000
46%
$ 103,522,000
$
$
140,981,000
$
Notes:
1. Includes all expenditure accounts net of recharge income.
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Actual Administrative Cost Recovery
(excl. Medical Center & Medical Compensation)
2003/04
Other Sources-Other
Student Affairs
A. S. Class Materials
A.S. Lecture Notes
Guardian Advertising
Price Center Rental
$
Academic Support
Health Sciences
Psychiatric Clinical Services
Marine Sciences
Stephen Birch Aquarium Museum
Auxiliary Enterprises
Business Affairs
Bookstore
Day Care Center
Housing, Dining & Hospitality
Transportation Services
Marine Sciences
SB Aquarium Museum Bookstore
Student Affairs
Bike Shop
Grove Cafe
Muir College Sundry Shop
Price Ctr Gameroom
Sports Facilities Concessions
Student Tuition & Fees
Academic Affairs
Summer Session
Health Sciences
OCME General Courses
UNEX Fee Income
4,000
3,000
4,000
6,000
16,000
$
Total Expenditures
Effective Recovery Rate
$
4,000
3,000
5,000
7,000
19,000
$
2007/08
5,000
3,000
5,000
7,000
21,000
$
5,000
3,000
6,000
8,000
22,000
25%
0%
50%
33%
38%
33,000
38,000
44,000
44,000
63%
18,000
46,000
18,000
51,000
23,000
61,000
27,000
70,000
29,000
72,000
61%
57%
125,000
25,000
441,000
183,000
141,000
25,000
468,000
189,000
157,000
25,000
496,000
194,000
173,000
25,000
496,000
200,000
188,000
25,000
496,000
205,000
50%
0%
12%
12%
8,000
9,000
10,000
10,000
10,000
25%
5,000
12,000
3,000
3,000
4,000
809,000
5,000
12,000
3,000
3,000
4,000
859,000
5,000
12,000
3,000
3,000
4,000
909,000
5,000
12,000
3,000
3,000
4,000
931,000
5,000
12,000
3,000
3,000
4,000
951,000
0%
0%
0%
0%
0%
18%
-
23,000
107,000
160,000
$
4,000
3,000
4,000
6,000
18,000
% Change
2006/07
27,000
30,000
Total Recovery
Administrative Recharge (1)
2005/06
2004/05
Attachment 8A
1,031,000
103,522,000
1.00%
42,000
26,000
134,000
160,000
$
1,088,000
118,449,000
0.92%
-
29,000
162,000
233,000
$
1,222,000
124,176,000
0.98%
-
32,000
190,000
222,000
$
1,244,000
140,981,000
0.88%
$
-100%
32,000
218,000
250,000
39%
104%
56%
1,295,000
26%
151,287,000
0.86%
46%
-14%
Notes:
1. Calculated on prior year expenditure levels.
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Recalculated Administrative Recharge
(excl. Medical Center Medical Compensation)
Administrative
Recharge (1), (2)
Actual
Recalculated
2008/09
2008/09
Actual
Expenditures
2007/08
Other Sources-Other
Student Affairs
A. S. Class Materials
A.S. Lecture Notes
Guardian Advertising
Price Center Rental
$
Academic Support
Health Sciences
Psychiatric Clinical Services
Marine Sciences
Stephen Birch Aquarium Museum
Auxiliary Enterprises
Business Affairs
Bookstore
Day Care Center
Housing, Dining & Hospitality
Transportation Services
Marine Sciences
SB Aquarium Museum Bookstore
Student Affairs
Bike Shop
Grove Cafe
Muir College Sundry Shop
Price Ctr Gameroom
Sports Facilities Concessions
Student Tuition & Fees
Academic Affairs
Summer Session (3)
UNEX Fee Income
Health Sciences
OCME General Courses
Total
$
448,000
146,000
334,000
149,000
1,077,000
Change
Effective
Rate
6,000
3,000
6,000
8,400
23,400
6,000
4,000
6,000
6,000
22,000
1,000
(2,400)
(1,400)
1.3%
2.7%
1.8%
4.0%
2.0%
4,373,000
44,000
53,000
9,000
1.2%
3,492,000
7,865,000
32,300
76,300
47,000
100,000
14,700
23,700
1.3%
1.3%
28,329,000
2,041,000
63,834,000
9,145,000
188,000
25,000
496,000
205,000
322,000
20,000
953,000
300,000
134,000
(5,000)
457,000
95,000
1.1%
1.0%
1.5%
3.3%
1,018,000
10,000
10,000
225,000
178,000
198,000
23,000
326,000
105,317,000
5,000
7,000
3,000
3,000
4,000
946,000
5,000
6,000
3,000
2,000
4,000
1,625,000
6,785,000
25,826,000
246,000
246,000
-
0.0%
1.0%
4,417,000
37,028,000
32,000
278,000
62,000
308,000
30,000
30,000
1.4%
0.8%
2,055,000
731,300
1.4%
151,287,000
$
Attachment 8B
$
1,323,700
$
(1,000)
(1,000)
679,000
1.0%
2.2%
3.4%
1.5%
8.7%
1.2%
1.5%
Notes:
1. Actual 2008/09 recharge was based on 2000/01 expenditure levels. Recalculated 2008/09 recharge was based on 2007/08 expenditure levels.
2. Bookstore, Housing and Transportation are being billed 60% of the 2008/09 recalculated increment in FY 2008/09. This amount, $412,000, represents new,
incremental recovery in 2008/09.
3. Beginning FY 2006/07, Summer Session became state supported. Summer session per unit fees are equivalent to systemwide fees that students pay during the academic year.
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Actual Expenditures
Medical Center & Medical Compensation
2003/04
Medical Center
Health Sciences
Hospital
$ 441,714,000
Medical Compensation
Health Sciences
Med Sch Clin Comp Plan
Ped-Cystine Determinations
Ped-Biochem Cal Genetics Labortory
Med-Dermatopath Dermatologic Immun
Peds-Tay Sachs Testing
Med-Bone Marrow Trasplant
Med-Cytogenetic Laboratory
Mgd Care-UCSD Health Plan
Total Expenditures
36,614,000
161,000
561,000
162,000
131,000
646,000
3,022,000
14,029,000
55,326,000
$ 497,040,000
Attachment 9
2004/05
Actual Expenditures
2005/06
2006/07
2007/08
$ 486,094,000
$ 524,294,000
$ 572,482,000
$ 649,324,000
53,167,000
206,000
590,000
2,000
99,000
282,000
3,350,000
3,000
57,699,000
56,655,000
98,000
701,000
98,000
154,000
137,000
3,251,000
61,094,000
62,308,000
1,000
850,000
141,000
79,000
269,000
3,221,000
66,869,000
$ 581,993,000
$ 633,576,000
$ 716,193,000
37,037,000
177,000
616,000
141,000
373,000
3,007,000
(138,000)
41,213,000
$ 527,307,000
% Change
47%
70%
-99%
52%
-13%
-40%
-58%
7%
-100%
21%
44%
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Administrative Recharges
Medical Center Medical Compensation
2003/04
Medical Center
Health Sciences
Hospital
$
Medical Compensation
Health Sciences
Med Sch Clin Comp Plan
Ped-Cystine Determinations
Ped-Biochem Cal Genetics Labortory
Med-Dermatopath Dermatologic Immun
Peds-Tay Sachs Testing
Med-Bone Marrow Trasplant
Med-Cytogenetic Laboratory
Mgd Care-UCSD Health Plan
Total Recovery
Total Expenditures
Effective Recovery Rate
2004/05
271,000
$
282,000
2,000
6,000
1,000
1,000
3,000
21,000
59,000
375,000
$
646,000
497,040,000
0.13%
Administrative Recharge
2005/06
285,000
$
294,000
2,000
6,000
1,000
1,000
4,000
23,000
63,000
394,000
$
679,000
527,307,000
0.13%
299,000
$
306,000
2,000
6,000
1,000
1,000
4,000
25,000
11,000
356,000
$
655,000
581,993,000
0.11%
Attachment 9A
% Change
2006/07
312,000
2007/08
$
318,000
2,000
6,000
1,000
1,000
5,000
27,000
360,000
$
672,000
633,576,000
0.11%
$
326,000
20%
330,000
1,000
6,000
1,000
1,000
5,000
27,000
371,000
17%
-50%
0%
0%
0%
67%
29%
0%
-1%
697,000
8%
716,193,000
0.10%
44%
-25%
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Proposed Administrative Recharge
Medical Center & Medical Compensation
Administrative
Recharge (1)
Actual
Recalculated
2008/09
2008/09
Actual
Expenditures
2007/08
Medical Center
Health Sciences
Hospital
$ 649,324,000
Medical Compensation
Health Sciences
Med Sch Clin Comp Plan
Ped-Cystine Determinations
Ped-Biochem Cal Genetics Labortory
Med-Dermatopath Dermatologic Immun
Peds-Tay Sachs Testing
Med-Bone Marrow Trasplant
Med-Cytogenetic Laboratory
Total
$
62,308,000
1,000
850,000
141,000
79,000
269,000
3,221,000
66,869,000
$ 716,193,000
$
Attachment 9B
Change
Effective
Rate
271,000
367,000
96,000
0.1%
282,000
6,000
1,000
6,000
27,000
322,000
514,000
12,000
2,000
1,000
38,000
567,000
232,000
6,000
1,000
(5,000)
11,000
245,000
0.8%
0.0%
1.4%
1.4%
0.0%
0.4%
1.2%
1%
934,000
341,000
0.1%
593,000
$
Notes:
1. 2007/08 recharge was calculated using 2000/01 expenditure levels. In fiscal year 2008/09, General Accounting recalculated the assessment
using 2007/08 expenditure levels, however, only Bookstore, Housing and Transportation will be billed for partial increases in FY 2008/09.
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Differential Income - Calculated vs. Negotiated Components
Organized Research
Calculated
Negotiated
Federal
Federal
Components
Components
Differential Income
Calculated
Negotiated
Federal
Federal
Components
Components
Attachment 10
% Change
(1)
Administrative
Deptartmental Administration
General Administration
Sponsored Project Administration
Student Administration & Services
Facilities
Building Depreciation
Building Interest (2)
Equipment Depreciation
Library
Operations and Maintenance
Rounding
Rate
Projected Increase in Cost Recovery
Administrative Vice Chancellors
Business Affairs
Resource Management & Planning
Subtotal
VC Responsible for Activity
Academic Affairs
Business Affairs
Health Sciences
Marine Science
Student Affairs
Subtotal
Allocation Total
17.20
7.73
3.37
0.10
16.80
6.50
2.60
0.10
17.20
7.73
-
16.80
6.50
-
2.4%
18.9%
0.0%
0.0%
7.00
4.77
3.84
3.95
12.64
5.00
5.00
3.50
2.00
13.00
7.00
4.77
12.64
-
5.00
4.00
13.00
(0.30)
40.0%
19.3%
60.60
54.50
49.34
45.00
9.6%
2007/08
Actual
$
538,000
214,000
751,000
345,000
55,000
436,000
1,163,000
2,000
2,001,000
$ 2,752,000
2007/08
Excess DI (3)
$
$
-
2007/08
Adjusted
$
538,000
214,000
751,000
-2.8%
0.0%
Recovery @
49.34%
$
589,000
235,000
824,000
(104,000)
(17,000)
(132,000)
(352,000)
(1,000)
(606,000)
241,000
38,000
304,000
811,000
1,000
1,395,000
264,000
42,000
333,000
889,000
1,000
1,529,000
(606,000)
$ 2,146,000
$ 2,353,000
Notes:
(1)
Costing principles includes 26% cap on administrative cost reimbursement.
(2)
Rate increases during this agreement are due to increases in building interest costs.
This cost does not apply significantly to recharge activities.
(3)
Adjustment of 2007/08 recovery to account for Differential Income in excess of 45%. Excess DI adjustment allocated based on
proportional share of total VC recovery (does not assume allocation of excess DI to Adminstrative VC's).
Source: FYE 2000/01 Organized Research Direct Cost Group
CBO
June 1, 2009
UNIVERSITY OF CALIFORNIA, SAN DIEGO
Auxiliaries & Self Supporting Assessment Tiger Team
Appendix A
OPERATING AND NONOPERATING REVENUES FOR THE PAST EIGHT YEARS
(Dollars in Thousands)
(UNAUDITED)
Student tuition and fees, net
Grants and contracts
Medical center
Educational activities
Auxiliary enterprises, net (1)
State educational appropriations
State financing appropriations
Private gifts
Investment income
Other (2)
Total
7 Year Avg. Annual
Change
Increase
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
96,927
503,453
416,700
140,496
75,394
298,031
17,462
31,511
16,955
20,415
1,617,344
104,370
538,216
435,460
143,611
80,416
309,049
17,412
36,795
14,599
21,897
1,701,825
119,801
583,271
455,909
148,585
88,325
295,733
14,699
38,571
13,329
22,067
1,780,290
144,887
638,852
498,250
163,853
100,455
268,539
16,775
51,991
12,401
22,294
1,918,297
176,265
660,524
556,737
162,670
106,167
250,531
17,313
49,372
14,486
30,502
2,024,567
192,606
686,472
620,946
181,127
109,378
260,587
21,579
48,014
19,562
34,039
2,174,310
202,465
738,575
659,469
204,164
120,610
282,940
18,658
62,618
22,384
56,930
2,368,813
230,451
765,512
732,500
223,764
130,696
301,300
17,602
59,136
24,505
54,936
2,540,402
138%
52%
76%
59%
20%
7%
11%
8%
73%
1%
1%
88%
45%
10%
0%
0%
13%
6%
169%
57%
24%
8%
Auxiliary/Self-Supporting/Other Sources
% Total Revenues
653,005
40.4%
681,384
40.0%
714,886
40.2%
784,852
40.9%
856,076
42.3%
945,490
43.5%
1,041,173
44.0%
1,141,896
44.9%
75%
11%
All Other Revenues
% Total Revenues
964,339
59.6%
1,020,441
60.0%
1,065,404
59.8%
1,133,445
59.1%
1,168,491
57.7%
1,228,820
56.5%
1,327,640
56.0%
1,398,506
55.1%
45%
6%
Notes:
1. Net of Scholarship Allowance.
2. Includes Service Enterprises, Property Rental and Other Sources.
Source: Detailed Financial Schedules for the Year Ended June 30, 2008
Summarized Selected Data for the Past Eight Years
CBO
June 1, 2009
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 1
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
GUIDELINES FOR
RECHARGE AND OTHER INCOME PRODUCING ACTIVITIES
I.
REFERENCES AND RELATED POLICIES
A.
University of California, Regulation No. 4. - Special Services to Individuals and
Organizations
B.
Planning and Budget Manual
Chapter 4010
Operating Budget Amendments
C.
University Policy on Activities Generating Unrelated Business Income.
D.
University of California Business and Finance Bulletin Manual (BFB)
E.
A-47
University Direct Costing Procedures, July 1, 1984
A-56
Academic Support Unit Costing and Billing Guidelines, April 15, 1986
A-59
Costing and Working Capital for Auxiliary and Service Enterprises,
July 1, 1982
UCSD Policy and Procedure Manual (PPM)
150-14
Facilities and Administrative Cost Rates Applicable to Research, Instruction
and Other Federal and Non-Federal Sponsored Projects
300-20
Sub-Cashiering and Change Funds
300-23
State Sales Taxes-The University as a Seller
380-1
Modification of the Operating Budget
480-20
Records Disposition Schedules
500-4
Approval and Execution of Incoming Purchase Orders for University Goods
and Services
F.
OMB Circular A-21, Cost Principles for Educational Institutions (Revised)
G.
UCSD Cost Accounting Standards Board Disclosure Statement (CASB DS-2),
June 30, 1996
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 2
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
II.
SCOPE
This issuance sets policies and procedures for the establishment, costing and pricing, and
administration of UCSD recharge and other income producing activities. These activities include
auxiliary enterprises, service enterprises, academic support activities, support group activities
and miscellaneous sales activities.
III.
DEFINITIONS
A.
Academic Support Activity
A recharge or other income producing activity within an academic department which
provides, at approved rates and on a regular and continuing basis, goods or services to a
specific group of users. Examples include testing services, computer services and
illustration services. Typically, an academic support activity may have a combination of
recharge and other income.
B.
Auxiliary Enterprise
An activity which provides, at approved rates and on a regular and continuing basis,
goods or services primarily to individual students, faculty, staff and, incidentally, to the
general public. Examples include the University Bookstore, Housing and Dining Services,
and Parking Services. Typically, an auxiliary enterprise will have only incidental recharge
income.
C.
Capital Costs
Costs of fixed assets, such as equipment, buildings and certain building improvements,
which benefit an extended period.
D.
Differential Income Reserve Fund
The accounting mechanism used to segregate and accumulate overhead cost recovery
from sales of goods or services to non-University individuals or entities.
E.
Direct Costs
Costs that can be consistently and specifically identified with the provision of goods or
services by an activity. Examples of such costs are salaries, employee benefits, cost of
materials, maintenance agreements and supplies.
F.
Equipment Replacement Reserve Fund
The accounting mechanism used to segregate and accumulate funds needed for future
equipment acquisitions.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 3
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
G.
Labor Clearing Fund
An Activity which redistributes personnel and related costs to multiple funding sources
within a specific department in circumstances which otherwise would require complex,
split-funded payroll transactions, using recharge methodology. A typical labor clearing
fund involves investigators and technicians whose effort from month to month directly
benefits numerous contracts and grants in varying amounts.
H.
Miscellaneous Sales Activity
Any recharge or other income producing activity that cannot be classified as an auxiliary
enterprise, service enterprise, academic support activity or support group
activity. Examples include real property rental activities, royalty income activities,
orientation programs, and departmental conference programs.
I.
Operating Costs
Expenditures, benefiting a single period, which are necessary to conduct normal
business. Examples of operating costs include employee wages and benefits, supplies
and equipment maintenance.
J.
Operating Fund
The accounting mechanism used to record operating costs and income.
K.
Other Income
Revenue received by a department or unit from the sale, at approved rates, of goods or
services to an organization not affiliated with the University or to individuals regardless of
their affiliation.
L.
Other Income Producing Activity
A department or unit that provides, at approved rates, goods or services to an
organization not affiliated with the University or to individuals regardless of their affiliation.
M.
Overhead Costs
Costs that are incurred for common or collective institutional objectives. In the Federal
Costing Principles and particularly when related to sponsored activities, these costs are
also called Facilities and Administrative (F&A) costs. Although overhead costs are not
readily identifiable with the provision of particular goods or services by an activity, they
benefit and are properly allocable to an activity. Examples of such costs are building
depreciation costs and campus administrative costs.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 4
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
N.
O.
Recharge
The assessment and collection by one University department or unit of an approved fee
for goods or services furnished to another University department or unit. In general, a
recharge reflects the sale, at approved rates, of goods or services by one department or
unit to another. For University financial reporting, a recharge is considered to be a cost
redistribution.
Recharge Activity
A department or unit that provides, at approved rates, goods or services to other
departments or units.
P.
Recharge Income
The credit received by a department or unit that furnishes, at approved rates, goods or
services to another department or unit. In general, the credit is equivalent to revenue from
the sale of goods or services.
Q.
Recharge Rate Review Committee
A committee that reviews and recommends approval or disapproval of requests to
establish new recharge and other income producing activities. The committee also
reviews and recommends approval or disapproval of rate change proposals and
proposals to add rates for new goods or services. The committee, whose membership
includes representatives from each Vice-Chancellor area, is advisory to the Assistant Vice
Chancellor, Business and Financial Services.
R.
Service Enterprise
An activity which provides, at approved rates and on a regular and continuing basis,
goods or services to a wide variety of campus departments, rather than to individuals.
Examples include Graphics and Reproduction Services, the campus Storehouse, the
Central Garage, and Telecommunication Services. Typically, a service enterprise will
have only incidental other income.
S.
Start-up Costs
Non-recurring costs necessary to prepare a new activity for its normal business purpose.
Start-up costs may include both capital expenditures, such as those for equipment, and
non-capital expenditures, such as moving expenses.
T.
Support Group Activity
A recharge activity which, using approved rate methodology, distributes a particular
category of direct cost to multiple funding sources within a specific department. Generally,
a support group is used to record and redistribute personnel and related costs in
circumstances which otherwise would require complex, split-funded payroll transactions.
A typical support group involves investigators and technicians whose effort from month to
month directly benefits numerous contracts and grants in varying amounts.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 5
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
U.
Unrelated Business Income
A type of other income resulting from sales of goods or services to individuals or
non-University entities. If sales are not substantially related to University educational or
research purposes, proceeds from the sales are considered to be unrelated business
income and are subject to Federal income tax reporting requirements. Examples include
income from sales of machine shop services and computing services to non-University
entities.
V.
Working Capital
Financing, or funding, required for current needs, such as inventories and accounts
receivable, and capital needs such as equipment, buildings and certain building
improvements.
IV.
EXCEPTIONS
Enumerated below are rates or rate methodology excepted from policies of this issuance
requiring review and approval by the Recharge Rate Review Committee:
A.
Hospital fees for patient services.
B.
Rates of Hospital recharge activities within fund group 63XXXX that provides goods or
services entirely to other Hospital units within the same fund group. However, the rates or
rate methodology of any Hospital activity, which recharges funds other than 63XXXX,
shall be subject to review and approval by the Recharge Rate Review Committee.
C.
Medical Group fees for patient services.
D.
Department of Psychiatry fees for patient services.
E.
The rates or rate methodology of any Auxiliary Enterprise within fund group
70000X-74999X which are subject to unique review procedures approved by the Vice
Chancellor-Business Affairs.
F.
University Extension and Office of Continuing Medical Education course fees.
G.
Campus Recreation class fees and intramural sports participant fees.
H.
Academic course material fees.
I.
Long-term agreements for the rental or lease of University property negotiated by the
Real Estate Development Office.
J.
Royalty, copyright and similar agreements negotiated by the Technology Transfer Office.
K.
Material Management sales of surplus property.
L.
University Events, Intercollegiate Athletics, and Departments of Theatre and Music ticket
sales.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 6
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
V.
M.
Administrative recharges to Auxiliary Enterprises by Central Administrative units.
N.
Recharges for Reapportionment and Funding Adjustments.
1.
Recharges assessing University Opportunity funds for replacement of medical
tuition initially charged to General Fund budgets.
2.
Recharge assessing Federal Contract and Grant Administration funds for contract
and grant related costs initially charged to General Funds budgets.
3.
Recharges assessing Educational Fee funds for institutional support and operation
and maintenance of plant services to student service activities.
4.
Recharges assessing construction projects for costs initially charged to Building
Program Clearing accounts.
5.
Recharges of administrative and supervisory costs of University Extension,
Residence and Dining facilities, and Auxiliary and Plant Services to the benefiting
units within their respective areas.
6.
Recharges assessing General Funds for teaching patient care initially charged to
Hospital or Medical Group funds.
POLICIES
A.
General Policies
Recharge and other billing transactions may be initiated only by those activities that
adhere to the general policies enumerated below.
1.
Establishment
a.
The benefits, including relative prices and quality, of the proposed activity
providing goods or services must be weighed against the benefits of
obtaining similar goods or services from commercial sources or other
University sources.
b.
Goods or services shall not be sold to the general public unless the goods or
services are unique or sales will not compete with commercial sources.
c.
If services are to be provided by the activity, they shall be unique or
specialized, as opposed to general administration or other institutional
support services.
d.
Proposals to establish new activities must be reviewed and approved by the
Recharge Rate Review Committee, except that proposals of activities with
projected annual income of less than $10,000 may be reviewed and
approved by the Chair of the Recharge Rate Review Committee on behalf of
the full Committee.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 7
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
2.
e.
New activities shall have a budget established in accordance with Planning
and Budget Manual Chapter 4010.
f.
To assure compliance with Federal requirements, each service center that
depreciates equipment in their charge rates must inventory the service
center equipment under a discrete custodial code, which is associated with
the service center operating fund.
Costing and Pricing
a.
Activities shall be charged for all direct costs involved in producing their
goods or services.
b.
All direct costs shall be recorded in the operating fund assigned to the
activity.
c.
Rates of activities shall be sufficient to recover all direct costs.
d.
In addition to being sufficient to recover all direct costs, rates for sales made
by activities to the general public shall recover overhead costs.
(1)
Rates of auxiliary enterprises shall recover actual overhead costs.
(2)
Rates of all other activities shall be based on the current negotiated
research rate for the campus, less four components: Equipment
Depreciation, Sponsored Project Administration, Library, and Student
Administration and Services. (See Supplement I for current
differential rates.) In the case where a particular sales/service activity
involves the resources of/results in administrative burden/cost to
Sponsored Project Administration, Library, or Student Services, the
affected components should not be excluded.
(a)
Normally, exceptions must meet one of the following conditions
in order to obtain approval:
i.
Off-Campus - If a sales/service activity is located in
space that is not owned or maintained by UCSD, an
off-campus differential rate will be added to sales to the
general public. If a sales service activity is affiliated with
the ship-use operation, with no space costs and all
departmental support costs factored into the charge
rate, a ship use differential rate will be added to sales to
the general public. (See Supplement I for current
differential rates.)
ii.
Capacity Considerations - When a sales/service activity
needs outside sales to attain/maintain a desirable
capacity that in turn keeps the sales/service cost low for
University clients, and when the standard overhead rate
would price the service out of a competitive position.
iii.
Quid Pro Quo - When a particular client, or all clients,
are providing something of tangible value to UCSD that
can be counted in lieu of full overhead on the
sales/service charge.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 8
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
(b)
(c)
(d)
Funds representing overhead cost recovery generated on or
after July 1, 1994, shall be distributed as follows:
i.
65% to, or as directed by, the Vice Chancellor
responsible for activity that generated the overhead
cost recovery.
ii.
25% to, or as directed by, the Vice Chancellor-Business
Affairs.
iii.
10% to, or as directed by, the Vice Chancellor-Resource
Management and Planning.
iv.
If an activity is determined to be off-campus or ship use,
and the off-campus differential rate or ship use rate is
added on sales to the general public, the differential
income which is generated will be distributed according
to the standard 65%-25%-10% formula. Otherwise,
where a sales/service has obtained approval to charge
a reduced overhead rate for outside sales, the income
will first be distributed to the administrative Vice
Chancellors, to fund their share, with the balance, if any,
retained by the Vice Chancellor responsible for the
activity. Example: If the sales/service charge is $100,
the standard rate is 40%, and the approved rate
exception is to 20%, resulting in $20 in overhead
income, the administrative share is 35% of $40 or $14;
the remaining portion of $6 is retained by the Vice
Chancellor responsible for the activity.
v.
Overhead cost recovery in excess of the standard rate
discussed in paragraph (2), above, shall be distributed to, or
as directed by, the Vice Chancellor responsible for the activity
that generated the overhead cost recovery cost recovery.
Funds representing overhead cost recovery that are distributed to an
activity's differential income reserve, may not be used to fund
operating costs of the activity.
Funds representing overhead cost recovery, which are
distributed to an activity's differential income reserve, may be
used to fund non-operating costs, such as equipment and
capital improvements of the activity. With the approval of the
cognizant Department Chair or Administrative Unit Head, such
funds also may be used for operating costs of the department
or unit, other than those of the activity itself.
e.
Capital expenditures, including cost of equipment, shall not be charged to
the operating fund of any activity that recharges Federally-funded users.
f.
Activities shall charge all users of goods or services at established,
approved rates.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 9
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
3.
g.
Identical goods or services provided to University users must have identical
rates.
h.
Rates of activities shall be stated in measurable units of goods or services
and a separate rate shall be established for each class of goods or services
provided.
i.
Rates shall be based on standard cost accounting methods. Rates shall not
be based on proations or other overhead methods of cost allocation, unless
the methodology is a calculation of unit costs supporting the goods and
services provided, and the methodology is approved by the Recharge Rate
Review Committee.
j.
Any subsidy provided to users should be provided through a central
allocation of discretionary funds that will permit activities to charge rates
based on full costs.
k.
Unless specifically approved by the Recharge Rate Review Committee,
fixed-price jobs shall not be quoted or billed to either University or
non-University users.
l.
Unless specifically approved by the Recharge Rate Review Committee,
rates charged to non-University users shall not be subsidized in any
manner.
Administration
a.
Activities shall submit any proposal to revise existing rates or rate
methodology to the Recharge Rate Review Committee for review and
approval.
b.
Recharge activity procedures, that include monthly statements to users,
shall be subject to the approval and periodic review of General Accounting,
as well as the periodic review of Audit & Management Advisory Services.
c.
Cash handling and billing procedures for recharge activities, shall be subject
to the approval of Student Business Services and General Accounting, and
the periodic review by Audit & Management Advisory Services.
d.
Activities shall maintain records to substantiate recharge and other billing
transactions, including requisitions, purchase orders, or similar written
verification of individual user requests for goods or services.
e.
Activities shall maintain records to substantiate that an individual user
requesting goods or services has the authority to do so.
f.
Activities shall provide users with a receipt or similar written confirmation for
each sale of goods or services at the time the sale is made. In addition,
recharge users shall be provided a detailed monthly statement for each
Index Number recharged.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 10
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
B.
g.
Activities shall initiate recharge or other billing transactions when goods and
services are provided. Activities shall not initiate recharge or other billing
transactions in advance of providing goods and services. Progress
recharges or billings may be made for jobs in process.
h.
Activities shall follow record retention policies contained in Policy and
Procedure Manual 480-20.
Specific Policies
In addition to the general policies described above, recharge and other billing transactions
may be initiated only by those activities that adhere to the specific policies enumerated
below.
1.
Auxiliary Enterprises
a.
b.
c.
Establishment
(1)
There must be a regular and continuing demand by students, faculty
or staff for the goods or services to be provided by the enterprise. The
demand must be significant, both in dollar amounts and number of
transactions.
(2)
There must be a three year operating plan which includes at a
minimum, the proposed annual budgets, annual operating statements
and balance sheets, proposed rates or rate methodology, funding
sources for start-up costs, funding sources for equipment, funding
sources for working capital, and funding sources for anticipated or
unanticipated operating deficits.
Costing and Pricing
(1)
Auxiliary enterprises shall be charged for all overhead costs that are
determined to benefit them, including costs of operation and
maintenance of plant and, in addition, central campus administrative
services.
(2)
Auxiliary enterprises shall establish rates sufficient to recover all
direct and overhead costs.
(3)
Auxiliary enterprises may set rates that not only recover all direct and
overhead costs, but also accumulate funds for working capital.
Administration
(1)
Per Systemwide policy, at least once every five years each auxiliary
enterprise shall be reviewed to assure that it continues to serve an
important University need, is cost-effective considering alternative
commercial sources, and only incidentally serves the general public.
Each evaluation shall result in a written report that justifies the
decision by the Chancellor to continue or discontinue the enterprise.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 11
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
2.
Service Enterprises and Academic Support Activities
a.
b.
Establishment
(1)
There must be a regular and continuing demand for the goods or
services to be provided by the service enterprise or academic support
activity. The demand must stem from multiple users and be
significant, both in dollar amounts and in number of transactions.
(2)
There must be an annual operating plan which includes at a
minimum, the proposed annual budget, annual operating statement,
proposed rates or rate methodology, funding sources for start-up
costs, funding sources for equipment, funding sources for working
capital, and funding sources for anticipated or unanticipated operating
deficits.
Costing and Pricing
(1)
(2)
Other than acquisitions funded by the Federal government, all
inventoriable equipment assigned to service enterprises or academic
support activities shall be depreciated.
(a)
Depreciation costs shall be considered direct costs and an
equipment replacement reserve fund shall be established.
(b)
Depreciation shall be on a straight-line basis, unless it can be
demonstrated that some other method is more appropriate.
Under certain circumstances, service enterprises and academic
support activities may establish rates which recover not only all direct
costs, but also accumulate funds for working capital.
(a)
If Federal funds are recharged, a refund of that portion of the
recharge rate representing working capital accumulation must
be made to Federal funds.
(b)
c.
Alternatively, certain service enterprises or academic support
activities may refuse to provide goods or services to
Federally-funded users.
Administration
(1)
Service enterprises and academic support activities shall be operated
on a break-even basis. A year-end surplus should not exceed an
amount equivalent to an average two months of operating costs. By
October 1 of the following fiscal year, activities with surplus or deficit
balances in excess of this limitation must provide General Accounting
with their planned action to reduce or eliminate these surplus/deficit
balances.
(a)
A surplus or deficit balance occurring in any year shall be
taken into consideration when adjusting rates of a subsequent
year.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 12
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
(b)
3.
In exceptional cases where such adjustment would create a
severe fluctuation in rates from one year to the next,
achievement of a break-even balance may be extended for a
reasonable period.
Labor Clearing Funds
a.
b.
c.
Establishment
(1)
There must be a regular and continuing need, within a specific
department, to fund salaries, benefits, and related costs such as
network/telecommunication access fees from multiple sources in
amounts that vary from period to period. The costs and the number of
funding sources must be significant.
(2)
It must be demonstrated that the advantages of establishing a labor
clearing fund significantly outweigh directly charging the cost to the
multiple sources. The typical labor clearing fund avoids the need for
complex split-funding of personnel and related costs.
(3)
There must be an annual operating plan which includes at a
minimum, the projected annual volume of personnel and related costs
to be recorded by the labor clearing fund, a listing of the funds to
which the costs will be cleared and the methodology to be used.
Although not a recharge activity, a labor clearing fund does distribute
costs using a unique rate methodology. Prior to a labor clearing
fund's establishment, its proposed rate methodology must be
reviewed and approved by the Committee. Subsequent proposed
revisions to a labor clearing fund's methodology also must be
reviewed and approved by the Committee.
Costing and Pricing
(1)
The labor clearing fund shall be charged only the personnel and
related costs to be cleared.
(2)
In a typical labor clearing fund, rate methodology will provide
separate, unique rates for each person in the group.
Administration
(1)
Labor clearing funds shall be operated on a break-even basis.
(a)
A written explanation of a surplus or deficit balance occurring
at the end of any given fiscal year shall be submitted to
General Accounting after the end of each fiscal year.
(b)
A surplus or deficit balance occurring in any year shall be
corrected in the succeeding year.
Exhibit D provides detailed illustrations of the establishment
and costing and pricing of labor clearing funds.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 13
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
4.
Miscellaneous Sales Activities
a.
b.
Establishment
(1)
There must be a continuing demand for the goods or services to be
provided by the miscellaneous activity.
(2)
There must be an annual operating plan which includes at a
minimum, the proposed annual budget, annual operating statement,
proposed rates or rate methodology, funding sources for start-up
costs, funding sources for equipment, funding sources for working
capital, and funding sources for anticipated or unanticipated operating
deficits.
Administration
(1)
VI.
Normally miscellaneous sales activities shall be operated on a
break-even basis. A year-end surplus or deficit balance should not
exceed an amount equivalent to an average two months of operating
costs.
(a)
A surplus or deficit balance occurring in any year shall be
taken into consideration when adjusting rates of a subsequent
year.
(b)
In exceptional cases where such adjustment would create a
severe fluctuation in rates from one year to the next,
achievement of a break-even balance may be extended for a
reasonable period.
(c)
Activities with an unacceptable surplus or deficit balance in
three consecutive years are required to revise their charge
rates.
PROCEDURES
A.
Establishing New Activities
Requests to establish new recharge or other income producing activities shall follow the
procedures enumerated below.
1.
Requests shall include the information outlined in Exhibit A of this chapter.
2.
Requests shall be reviewed and approved by the cognizant Department Chair or
Administrative Unit Head and forwarded to the Chair of the Recharge Rate Review
Committee.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 14
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
3.
The Chair of the Recharge Rate Review Committee shall review the request. If the
proposed activity has projected annual income of less than $10,000, the Chair may
approve the activity on behalf of the full Committee. In such cases, the Chair will
notify the full Committee of the approval.
4.
If the Chair determines a request to be deficient, the request shall be returned to
the office that originated the request. The Chair also shall provide notice of such
action to the cognizant Department Chair or Administrative Unit Head.
5.
If the Chair determines a request is satisfactory, the Chair shall distribute copies of
the request to each member of the Recharge Rate Review Committee for review.
6.
After reviewing the request, Committee members will send the Chair an e-mail or
other acknowledgment which indicates their concurrence with the proposal or
which provides comments, questions or objections.
7.
The Chair shall summarize and submit all Committee members' comments,
questions, and objections to the office that originated the request. The Chair also
shall submit a copy to the cognizant Department Chair or Administrative Unit Head.
8.
The office that originated the request shall provide the Chair with responses to all
comments, questions, and objections. The originating office also shall submit a
copy of the responses to the cognizant Department Chair or Administrative Unit
Head.
9.
The Chair will submit the responses to each member of the Committee.
10.
If the Committee has no comments, questions or objections, or after satisfactory
resolution of all comments, questions or objections, the Chair shall submit the
Committee's recommendations to the Assistant Vice Chancellor, Business and
Financial Services for review and approval.
11.
Upon approval by the Assistant Vice Chancellor, Business and Financial Services,
the Chair shall provide the originating office, cognizant Department Chair or
Administrative Unit Head, and Business and Financial Services - General
Accounting Division with a written notice stating the following:
12.
a.
The request to establish the new activity has been approved by the campus
Recharge Rate Review Committee.
b.
The effective start date of the new activity.
c.
The approved rates or rate methodology of the new activity.
Business and Financial Services-General Accounting Division shall provide the
originating office with a written notice stating the following:
a.
The accounting distribution of the new activity.
b.
General Accounting contact for the new activity.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 15
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
13.
B.
If the approved service center's charge rates include equipment depreciation, the
originating office shall obtain a discrete custodial code for that activity from
Equipment Management, and file an EIMR transferring all of the activity equipment
to the new custodial code.
Revising Established Activities
Requests by established activities to change rates, to change rate methodology and to
add rates for new goods or services shall follow the procedures enumerated below.
1.
Requests shall include the information outlined in Exhibit B of this chapter.
2.
Requests shall be reviewed and approved by the cognizant Department Chair or
Administrative Unit Head and forwarded to the Chair of the Recharge Rate Review
Committee.
3.
The Chair of the Recharge Rate Review Committee shall review the request. If the
proposed activity has projected annual income of less than $10,000, the Chair may
approve the activity on behalf of the full Committee. In such cases, the Chair will
notify the full Committee of the approval.
4.
If the Chair determines a request to be deficient, the request shall be returned to
the office that originated the request. The Chair also shall provide notice of such
action to the cognizant Department Chair or Administrative Unit Head.
5.
If the Chair determines a request is satisfactory, the Chair shall distribute copies of
the request to each member of the Recharge Rate Review Committee for review.
6.
After reviewing the request, Committee members will send the Chair an e-mail or
other acknowledgment which indicates their concurrence with the proposal or
which provides comments, questions or objections.
7.
The Chair shall summarize and submit all Committee members' comments,
questions, and objections to the office that originated the request. The Chair also
shall submit a copy to the cognizant Department Chair or Administrative Unit Head.
8.
The office that originated the request shall provide the Chair with responses to all
comments, questions, and objections. The originating office also shall submit a
copy of the responses to the cognizant Department Chair or Administrative Unit
Head.
9.
The Chair will submit the responses to each member of the Committee.
10.
If the Committee has no comments, questions or objections, or after satisfactory
resolution of all comments, questions or objections, the Chair shall submit the
Committee's recommendations to the Assistant Vice Chancellor, Business and
Financial Services for review and approval.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 16
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
11.
12.
VII.
Upon approval by the Assistant Vice Chancellor, Business and Financial Services,
the Chair shall provide the originating office, the cognizant Department Chair or
Administrative Unit Head, and Business and Financial Services - General
Accounting Division a written notice stating the following:
a.
The request to change rates, rate methodology, or add rates for new goods
or services has been approved by the campus Recharge Rate Review
Committee.
b.
The effective date of the approval.
Annually after final closing, General Accounting will produce a listing of any
recharge activities with a surplus or deficit balance in excess of an amount
equivalent to an average two months of operating costs. For those activities which
have not provided the information required by Section V.B.2. above by October 1 of
the following year, General Accounting will contact any such activities, and request
a written assurance that the surplus or deficit balance will not continue, describing
the basis for the assurance. General Accounting will notify the Chair of the
Recharge Review Committee of any activities with an unacceptable surplus or
deficit balance in three consecutive years. The Chair will notify any such activities
that they are required to revise their charge rates.
RESPONSIBILITY
A.
B.
Office Originating Request
1.
Submits to cognizant Department Chair or Administrative Unit Head request to
establish new recharge or other income producing activities, request to change
rates or rate methodology of established activities, or request to add rates for new
goods or services of established activities.
2.
Participates in resolution of comments, questions, and objections to request.
3.
Assures costing and pricing policies are followed. Obtains a discrete custodial code
for the activity if any equipment depreciation is included in the charge rates and
processes an EIMR to transfer the equipment to the new custodial code.
4.
Maintains supporting documentation for sales transactions.
5.
Provides sales confirmations to users, including a detailed monthly statement for
recharge users.
6.
Conforms to approved cash-handling, billing and recharge procedures.
Department Chair or Administrative Unit Head
1.
Reviews and approves request from originating office.
2.
Forwards request to Chair of Recharge Rate Review Committee.
3.
Participates in resolution of comments, questions, and objections to request.
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SECTION 300-40 PAGE 17
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
C.
D.
E.
Chair of Recharge Rate Review Committee
1.
Reviews request received from Department Chair or Administrative Unit Head.
2.
Coordinates review process, including resolution of Committee comments,
questions and objections
3.
Submits Committee's recommendations to the Assistant Vice Chancellor, Business
and Financial Services.
4.
Forwards request to establish new activity to Resource Management-Budget
Operations, Planning and Analysis.
5.
Provides written confirmation of approved requests to originating office, cognizant
Department Chair or Administrative Unit Head, and Business and Financial
Services - General Accounting Division.
6.
Notify any activities with an unacceptable surplus or deficit balance in three
consecutive years that they are required to revise their charge rates.
7.
As needed extracts all equipment under custodial codes associated with sales and
service operating funds and excludes them from campus overhead rate or
Unrelated Business Income calculations.
Recharge Rate Review Committee
1.
Reviews request distributed by Committee Chair.
2.
Communicates comments, questions, and objections to Chair.
3.
Participates in resolution of comments, questions and objections relating to
request.
Equipment Management
1.
2.
F.
Establishes discrete custodial codes for new activities that include equipment
depreciation in their charge rates.
Associates the activity's custodial code with the activity's operating fund.
Business and Financial Services
1.
Assistant Vice Chancellor Business and Financial Services
a.
Provides final approval to request.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 18
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
2.
3.
General Accounting Division
a.
Provides accounting distribution for new activity.
b.
Reviews and approves recharge procedures.
c.
Produce an annual listing of any recharge activities with a surplus or deficit
balance in excess of an amount equivalent to an average two months of
operating costs.
d.
For those activities which have not provided the information required by
Section V.B.2., above, by October 1 of the following year, contact such
activities and request a written assurance that the surplus or deficit balance
will not continue, describing the basis for the assurance.
e.
Notify the Chair of the Recharge Review Committee of any activities with an
unacceptable surplus or deficit balance in three consecutive years.
Bursars Office
a.
Reviews and approves cash-handling and billing procedures.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 19
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit A
INFORMATION REQUIRED FOR REQUEST TO ESTABLISH NEW ACTIVITY
1.
Briefly describe the proposed activity and the goods or services to be provided by it.
2.
Provide the following information:
a.
The name and title of the faculty member or administrator who accepts
responsibility for the activity.
b.
The requested starting date of the activity.
c.
The name and mail code of the activity's financial manager.
d.
If the proposed activity has primary use of a specific space, provide the building(s)
and room number(s).
3.
Briefly describe and indicate locations of commercial and other non-University sources
from which similar goods or services may be obtained.
4.
Briefly describe other University sources from which similar goods or services may be
obtained.
5.
If similar goods or services may be obtained from non-University sources or other
University sources, explain the necessity for the proposed activity.
6.
If the goods or services have been provided free of charge in the past:
a.
Describe and provide the account distribution of past funding.
b.
Explain the necessity for now charging for the goods or services.
7.
State the proposed activity's anticipated number of monthly users.
8.
State the proposed activity's anticipated monthly dollar volume of combined recharge and
other income.
9.
State the number of years the activity is anticipated to continue to provide its goods or
services.
10.
State the estimated percentage of users by the following categories:
a.
UC Departments:
1.
Fed & Fed flow-thru funded users ________ %
2.
Non-Federally funded users ________ %
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SECTION 300-40 PAGE 20
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
b.
c.
UC Individuals:
1.
Student ________ %
2.
Faculty ________ %
3.
Staff ________ %
4.
Patients ________ %
Non-UC Individuals & Entities ________ %
Total 100 %
11.
12.
Briefly describe any unique connection between the proposed activity and any Federal
contract or grant, including:
a.
Any subsidy, direct or overhead, to be provided by the Federal contract(s) or
grant(s).
b.
Any limitation the Federal contract(s) or grant(s) place on use of the proposed
activity's income.
Briefly describe any unique connection between the proposed activity and any nonFederal funding source, including:
a.
Any subsidy, direct or indirect, to be provided the funding source.
b.
Any limitation the funding source places on use of the proposed activity's income.
13.
If goods or services are to be sold to non-University individuals or entities, provide
information conclusively showing that satisfactory commercial or other non-University
sources for similar goods or services do not exist elsewhere.
14.
Provide the following financial information:
a.
Proposed rates with supporting calculations. SAMPLE RATE CALCULATIONS
APPEAR IN EXHIBIT C. In the case of certain auxiliary enterprises and support
groups, proposed pricing or rate methodology may be substituted for individual
rates.
b.
A projected annual operating (profit and loss) statement. Proposed auxiliary
enterprises must submit projected annual operating statements for three years.
c.
A projected balance sheet for the end of the first full year of operations. Proposed
auxiliary enterprises must submit projected balance sheets for the end of each of
the first three full years of operations.
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SECTION 300-40 PAGE 21
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
d.
15.
Proposed funding sources for:
1.
Start-up costs.
2.
Working capital.
3.
Equipment to be acquired.
4.
Operating deficits, anticipated or unanticipated.
e.
A listing of initial equipment, including UC identification number, UC custodial code,
date of acquisition, purchase order number, cost and funding source for the cost.
f.
If equipment is to be depreciated, the listing described in paragraph f, above,
should be expanded to include, for each item of equipment, the projected useful life
of the item, the calculated per-year depreciation for the item, and the total
depreciation of all items for the first full year of operations.
Provide the following tax information:
a.
Sales Tax. If the proposed activity will sell tangible personal property (goods),
explain why the activity should NOT be subject to California sales tax regulations.
b.
Unrelated Business Income Tax. If the proposed activity will sell goods or services
to individuals or entities, explain how the sales will relate to the University's
educational or research mission. SALES NOT RELATED TO THE UNIVERSITY'S
EDUCATIONAL OR RESEARCH MISSION WILL BE REPORTED AS
UNRELATED BUSINESS INCOME AND WILL BE SUBJECT TO FEDERAL
INCOME TAX REGULATIONS.
16.
If the proposed activity will have point of sale, or cash, transactions, provide a copy of
cash handling procedures. CASH HANDLING PROCEDURES MUST BE APPROVED
BY THE BURSARS OFFICE.
17.
If the proposed activity will recharge other University departments, provide a copy of
recharge procedures, including a sample of the monthly statement to be provided
recharge users. RECHARGE PROCEDURES MUST BE APPROVED BY GENERAL
ACCOUNTING.
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SECTION 300-40 PAGE 22
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit B
INFORMATION REQUIRED FOR
REQUEST TO CHANGE RATES OR RATE METHODOLOGY
AND
REQUEST TO ADD RATES FOR NEW GOODS OR SERVICES
1.
Briefly describe the activity and the goods or services currently provided by it.
2.
Provide a list comparing existing rates with proposed rates.
3.
Provide a brief description of the basis for the proposed rate changes.
4.
Provide the following information:
5.
a.
The name and title of the faculty member or administrator currently responsible for
the activity.
b.
The requested effective date of the proposed rate changes.
c.
The name and mail code of the activity's financial manager.
d.
If the activity has primary use of a specific space, provide the building(s) and room
numbers.
e.
A sample of the monthly statement currently provided recharge users.
State the percentage of current users by the following categories:
a.
b.
c.
UC Departments:
1.
Fed & Fed flow-thru funded users ________ %
2.
Non-Federally funded users ________ %
UC Individuals:
1.
Students ________ %
2.
Faculty ________ %
3.
Staff ________ %
4.
Patients ________ %
Non-UC Individuals & Entities ________ %
Total 100 %
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 23
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
6.
7.
Briefly describe any unique connection between the activity and any Federal contract or
grant, including:
a.
Any subsidy, direct or indirect, provided by the Federal contract(s) or grant(s).
b.
Any limitation the Federal contract(s) or grant(s) place on use of the activity's
income.
Briefly describe any unique connection between the activity and any non-Federal funding
source, including:
a.
Any subsidy, direct or indirect, provided by the funding source.
b.
Any limitation the funding source places on use of the activity's income.
8.
If goods or services are sold to non-University individuals or entities, provide information
conclusively showing that satisfactory commercial or other non-University sources for
similar goods or services do not exist elsewhere.
9.
Provide the following financial information:
10.
11.
a.
Supporting calculations for the proposed rate changes. SAMPLE RATE
CALCULATIONS APPEAR IN EXHIBIT C OF THIS PPM. In the case of certain
auxiliary enterprises and support groups, proposed pricing or rate methodology
may be substituted for individual rates.
b.
A projected annual operating (profit and loss) statement reflecting the rate
changes.
Provide the following tax information:
a.
Does the activity currently collect California sales tax?
b.
Does the activity currently report Unrelated Business Income?
If the request includes a proposal by an existing activity to establish rates for new goods
or services, provide the following additional information:
a.
Briefly describe and indicate locations of commercial and other non-University
sources from which similar goods or services may be obtained.
b.
Briefly describe other University sources from which similar goods or services may
be obtained.
c.
If similar goods or services may be obtained from non-University sources or other
University sources, explain the necessity for the proposed activity.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 24
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
d.
If the goods or services have been provided free of charge in the past:
1.
Describe and provide the accounting distribution of past funding.
2.
Explain the necessity for now charging for the goods or services.
e.
State the anticipated number of monthly users of the goods or services.
f.
State the anticipated monthly dollar volume of combined recharge and other
income from the goods or services.
g.
If the new goods or services are to be sold to non-University individuals or entities,
provide information conclusively showing that satisfactory commercial or other
non-University sources for similar goods or services do not exist elsewhere.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 25
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit C-1
SAMPLE OF
CALCULATION OF PRODUCTIVE HOURS
The estimation of productive hours used in calculating recharge rates is determined by deducting from
available working hours vacation, holiday, and sick hours usage and non-productive hours used for
clean-up, general maintenance, etc.
Vacation hours earned varies by individual. Determination of sick-leave usage and non-productive hours
can be estimated using past experience of the department as a guide.
The productive hours calculated are those hours that are expected to be rechargeable.
An example follows:
Employee 1
Employee 2
Employee 3
2.088
2.088
2.088
6.264
Less: Vacation Hours
120
120
160
400
Holiday Hours
104
104
104
312
56
56
56
168
Non-Productive hours
144
120
120
384
Total Deductions
424
400
440
1.264
Productive hours
1.664
1.688
1.648
5,000
Total Working Hours
Sick Leave Hours
Total
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SECTION 300-40 PAGE 26
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit C-2
SAMPLE RATE CALCULATION
ACTIVITY WHOSE SERVICES ARE MAINLY LABOR
For an activity, such as a machine shop, whose recharge rates are composed of charges for labor and
materials, the labor rate is an hourly rate calculated as follows:
Projected Operating Expenses:
Salaries
Employee Benefits
$100,000
25,000
Supplies Benefits
6,000
Equipment Depreciation
8,000
Other_________________________
Total Operating Expense
—139,000
Adjustment for Prior Years’ OperationsDeduct Surplus or Add Deficit
Subtotal
Less Materials Mark-Up Recovery (1)
Total
Estimated Productive Hours (See C-1)
Hourly Labor Rate<$134,000/5,000>
-—
139,000
5,000
$134,000
5,000
$26.80
(1) Materials mark-Up Recovery:
Cost of Materials
Mark-Up Percentage
Recovery
$500,000
10%
$5,000
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FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit C-3
SAMPLE RATE CALCULATION
ACTIVITY THAT PROVIDES STOCK MERCHANDISE
Recharge rates for activities, such as storerooms, which provide stock items to users, are based on the
cost of the merchandise plus a mark-up to cover the salaries and other operating expenses.
For a storeroom or storehouse there may be a single mark-up rate applicable to all stocked items or
possibly two or more rates for certain categories of merchandise. The mark-up percentage calculated as
follows:
Projected Operating Expenses:
Salaries
$100,000
Employee Benefits
25,000
Supplies Benefits
10,000
Equipment Depreciation
5,000
Other__________________________
Total Operating Expense
—
140,000
Adjustment for Prior Years’ OperationsDeduct Surplus or Add Deficit
—
Subtotal
140,000
Projected Cost of Materials to be Resold
420,000
Calculation of Necessary Mark-Up:
Total Expenses
Cost of Materials
$140,000
$420,000
=Percentage
Mark-Up on
Cost
=33%
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FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit C-4
SAMPLE RATE CALCULATION
ACTIVITY THAT PRODUCES GOODS OR TESTING SERVICES
An activity, such as a photo lab or a lab providing testing services, often must develop a list, or catalog, of
rates. Rates for individual catalog items are determined by calculating labor and other costs for each item.
The first step is to calculate an hourly labor rate that will recover general operating expenses. If needed,
the hourly rate can be reduced to a per-minute rate.
The following page has Sample Rate Calculations for items produced by a photo lab. Note that each item
has unique equipment depreciation, equipment maintenance and materials costs that are part of each
item's rate calculation.
A proof of calculation, also shown on the following page, should be prepared to verify the calculated
rates.
Projected Operating Expenses:
Salaries
Employee Benefits
$110,000
30,000
Supplies Benefits
7,000
General Equipment Depreciation
3,000
Other__________________________
Total Operating Expense
—
150,000
Adjustment for Prior Years’ OperationsDeduct Surplus or Add Deficit
Total
—
$150,000
Estimated Productive Hours (See C-1)
5,000
Hourly Labor Rate<$ 150,000/5,000>
$30.00
Per-Minute Rate <$30.00 / 60>
$.50
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FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit C-5
PRODUCTION RATES
COLOR PRINT
Labor per Item
Labor Cost per Minute
COLOR SLIDE
2 Minutes
1 Minute
$0.50
$0.50
Labor Cost per Item
$1.00
$0.50
Paper
$0.04
$0.10
Solution
$0.02
$0.05
Material Cost per Item:
Annual Special Equipment
Depreciation
$30,000.00
$35,000.00
Annual Special Equipment
Maintenance
$10,000.00
$15,000.00
Subtotal
$40,000.00
$50,000.00
$100,000.00
$100,000.00
Annual Item Production
Depreciation & Maintenance per Item
$0.40
$0.50
PER ITEM RATE
$1.46
$1.15
PROOF OF CALCULATION
Revenues:
Color Prints
100,000 Items x
$1.46
$146,000
Color Slides
100,000 Items x
$1.15
$115,000
Total Revenues
$261,000
Expenses:
Salaries
Employee Benefits
$110,000
$30,000
Supplies and Expense
$7,000
General Equipment Depreciation
$3,000
Special Equipment Depreciation
$65,000
Equipment Maintenance
$25,000
Materials (100,000 Items x $.06 and
1000,000 Items x $.150
$21,000
Total Expenses
Net Profit
$261,000
$0
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FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit C-6
SAMPLE RATE CALCULATION
ACTIVITY THAT PROVIDES EQUIPMENT RENTAL OR USE
An activity that offers equipment or instruments for rental or use can develop a rate for an individual item,
such as a microscope. Rates for classes or groupings of like items, such as camcorders, also are
possible.
The first step is to estimate annual usage of items. Usage can be measured by hours, half-days, days,
etc. For this example, estimated annual usage is:
Items
Annual Usage Per Item
Total Usage
10 Tape Recorders
200 days
2,000 days
20 Camcorders
150 days
3,000 days
Total Days Usage
5,000 days
The next step is to calculate per-day general operating expenses:
Projected Operating Expenses:
Salaries
$25,000
Employee Benefits
5,000
Supplies Benefits
3,000
General Equipment Depreciation
2,000
Other__________________________
Total Operating Expense
—
35,000
Adjustment for Prior Years’ OperationsDeduct Surplus or Add Deficit
Total
—
35,000
Estimated Days Usage
5,000
Operating Expense Per Day
$7.00
The following page has the completed sample calculation that includes costs unique to each class of
items.
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FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit C-7
EQUIPMENT RENTAL RATES
TAPE RECORDERS
Operating Expense per Day
CAMCORDERS
$7.00
$7.00
Annual Special Equipment
Depreciation
$3,000.00
$2,000.00
Annual Special Equipment
Maintenance
$1,000.00
$1,000.00
Subtotal
$4,000.00
$3,000.00
2,000
3,000
Annual Days Usage
Depreciation & Maintenance per Day
$2.00
$1.00
DAILY RATE
$9.00
$8.00
PROOF OF CALCULATION
Revenues:
Tape recorders
2,000 Days x $9.00
$18,000
Camcorders
3,000 Days x $8.00
$24,000
Total Revenues
$42,000
Expenses:
Salaries
$25,000
Employee Benefits
$5,000
Supplies and Expense
$3,000
General Equipment Depreciation
$2,000
Special Equipment Depreciation
$5,000
Equipment Maintenance
$2,000
Total Expenses
Net Profit
$42,000
$0
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 32
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Exhibit D
LABOR CLEARING FUNDS
Labor clearing funds can be used by departments to expedite and provide an equitable allocation of
salaries, benefits, and related costs, such as network/telecommunication access fees, of employees
who, during each month, work on different projects and activities supported by different funds. When
payroll is processed, labor costs are initially charged to these clearing accounts and then allocated to
the various project/activity accounts. The allocations of expenses are based on the employees' daily
or monthly accounting of their efforts on specific projects/activities.
I.
SOME IMPORTANT CRITERIA FOR FEDERAL ACCEPTANCE
-costs charged to Federal grants and contracts and other funds through the clearing accounts
are properly authorized, allowable, reasonable, and necessary in accordance with established
guidelines;
- costs are allocated equitably, in proportion to benefits received by each project/activity; and
documentation is adequate to substantiate the cost allocations;
- recharge rate for each individual is based on actual salaries and benefits;
- recharges are processed timely, and there are no significant variances between the actual
labor costs and the related recharges; and
- cost transfers processed through the clearing accounts are adequately documented, properly
approved, and in accordance with Federal guidelines. (see Figure 4)
II.
ILLUSTRATION - MARINE PHYSICAL LABORATORY (MPL)
The Marine Physical Laboratory and the other organized research units and institutes of Scripps
Institution of Oceanography currently operate labor clearing accounts that utilize a FilemakerPro
database. The software was developed at SIO by the SIO Salary Recharge Committee. It was
modeled after the procedures used by the Marine Physical Laboratory in their manual system
described below. This software now provides greater accuracy, flexibility, and retrieval of
information related to our costs and distribution of expenditures. Please note that the description
below doesn't deal with the distribution of NGN costs, however, those costs are distributed in the
same manner as direct labor costs.
A.
RATES
- Staff/Academic/Hourly employees: monthly benefits are incorporated into recharge
rates.
- Recharge rates are based on the July DOPEs with adjustments based on individual
appointment issues considered. These rates are projected for the whole year. If there has
been or will be a significant change as a result of a change in the employee's
appointment, the rate will reflect these adjustments or benefit accrual (i.e., social security
issues or student issues).
- Staff: vacation, sick leave, holidays, jury duty, military leave expenses are incorporated
into individual recharge rates by obtaining a lab average except for vacation and holiday
which are fixed by an individual.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 33
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
- Academics (Research): As with University policy, sick leave is not considered a benefit
until used for MPL's academic staff. This is due to their extremely low usage rate.
(NOTE: Academics in the research series earn sick leave, professor series do not.)
Example A: Research Academic reports 8 hours sick leave. This benefit has not been
incorporated into the recharge rate in the downtime calculation, therefore is recharged to
the project on which the employee worked during the reporting period. This would be the
case if paid directly on the project as is done on the traditional University model.
Graduate Student Researchers (GSR) earn holidays based on their appointment terms.
GSRs at Scripps are normally appointed at 48.44% throughout the year.
Example B: A GSR 48.44% in July and is paid for the July 4th holiday. As the holiday is
not incorporated into the recharge rate in the downtime calculation, the holiday at 48.44%
is recharged to the project on which the employee worked during the reporting period. A
GSR is paid 9.69% in July as part of a fellowship appointment with a non-SIO department.
The holiday at 9.69% is recharged to the project on which the employee worked that
month.
- Hourly employees and short-term employees: holidays/sick leave are not considered to
be a benefit until used/earned. (NOTE: Casual employees often earn sick leave/holidays
only intermittently. These are instances that are unpredictable in nature). Benefits for
short-term employees are projected/calculated based on available PPS information.
9 month Academic summer salary is recharged using 174 hours as the basis of the
9-month appointee's salary for the summer months, and is recharged at the calculated
"OLN" (summer salary recharge rate). This is due to the derivation of the recharge hourly
rate which is averaged over the year to be 174 hrs./mo. Academic year is charged in 9
month service periods (Oct.- June) even though it is paid over 12 months.
B.
ADMINISTRATIVE SERVICES
Specific to MPL, costs for Administrative Services are considered a prorated direct cost.
Administrative costs are prorated and provide for the equitable assignment of those costs,
which, although allowable as direct charges to a contract or grant, are difficult or
impractical to apportion by other means. Examples include, but are not limited to charges
for janitorial services, administrative telephones, copying, graphics, postage, shipping,
administrative computer expense, payments in accordance with the terms of the tenancy
agreement with the Space and Naval Warefare Systems Center San Diego for guard and
fire protection services, buildings and ground maintenance, and fees for utility usage.
Laboratory Administrative Salaries and Benefits provide for equitable assignment of
laboratory administrative personnel working in support of contracts and grants. Although
allowable as a direct charge, it is difficult or impractical to equitably apportion by other
means.
These costs are prorated to the Salaries and Benefits (excluding any overtime) charged to
the individuals projects. The University overhead cost rate has been reduced to
compensate for the direct charging of these expenses for MPL's contract and grant
administration.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 34
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
C.
OVERTIME & REMOTE LOCATION ALLOWANCE
- Administrative Services costs are not calculated on overtime.
- Individual overtime benefits information is used for OT rate. No other burdens are
associated with OT.
- Comp time and shore leave saved in lieu of RLA payment are charged to the project on
which the overtime and RLA hours are worked. Comp time and shore leave hours are
fully burdened as the employee receives full benefit on hours when used. A recharge
adjustment is done for comp time or shore leave initially saved that is later paid; when
comp time or shore leave is paid rather saved, the benefits charged are at the lower
overtime or RLA rate. The recharge is adjusted to reflect the correct level of benefits paid
on the employee’s hours. A credit of the "comp time saved" or "shore leave saved" hours
and a charge of the "comp time paid" or "RLA paid" hours is done.
- Balance of comp time or shore leave saved should be reviewed at year end.
D.
PERIOD RECHARGED
- Split month (21st to 20th) timesheets are used to allow timely submission of costs
allocable to projects. (i.e.: timesheets for 10/21/XX-11/20/XX period will have costs
charged in time to appear on the 11/XX ledgers). Allows for timely Federal billing.
- June final period 6/21-30 timesheets are required due to fiscal closing. June final
recharges generally make the final ledgers as MPL inputs directly into IFIS journaling
system module.
- July 1-20 period timesheets are used to begin the next FY, after which regular split
month time sheets are used.
- Employee’s timesheets that have not been received in time to be charged in the current
month recharge are tracked and charged as adjustments in subsequent months.
E.
FISCAL YEAR CLOSING REVIEW
Analysis of fund balances at June 30 is required to determine what the balance
represents. Costs & credits applicable to the period through June 30 but not recorded in
the June ledger may include, but is not limited to:
- Navy building maintenance charges, guard services, electricity & telephone billings. *
- Costs of goods received but not billed per ledger. *
- Computer hardware & system support, maintenance agreement costs expended but not
recharged. *
- Cost transfers /NPETS, PETS outstanding.
- Physical Plant Services jobs in progress. *
- Outstanding GUARD invoice payments due.
- Credits for Workshop/seminar expenses. *
- Recharge credits for overtime not paid in ledger but earned.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 35
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
- Recharge credits for bi-weekly/late timesheets not paid.
- Recharge credits for S&E items held in recharge clearing account pending index
determination. (i.e., transit risk, or resolution of billing disputes, etc.). *
- Comp time accrual commitment review.
* Specific to MPL & only relevant to Administrative Services - not labor related.
Balances are reviewed and analyzed annually. If a rate change is determined to be
necessary, a proposal is submitted to the University's recharge rate review committee for
review and approval of rate change
F.
ADJUSTMENTS
- Preliminary timesheets may be provided by seagoing personnel working on specific
project(s) and unavailable at sea/travel when timesheets are due. Revised timesheets are
submitted upon return. At that time project(s) are credited preliminary timesheet hours
and charged per revised timesheets. MSO review & signature required.
- Employees should obtain supervisor signature prior to submitting timesheets; however
when timesheets are received without supervisor signatures close to recharge submission
deadline, hours reported by employee are charged. Copies of the timesheet are made
and the timesheet is sent to the supervisor for signature. When the signed timesheet is
received back from the supervisor, it is compared against the copy. If changes are
indicated on the signed copy, it is marked "Revised", the unsigned copy is marked
"Preliminary" and stapled to the revised timesheet. Changes indicated on the revised
timesheet are incorporated into an adjustment to the recharge. MSO review & signature
required.
- Retroactive salary changes are treated as an adjustment. Original amount charged is
credited entirely and corrected amount (total hours * new rate) is submitted. (See
FIGURE 4)
- Cost transfers. When moving labor costs from one contract/grant to another, treat as a
cost transfer and obtain PI signature or his/her delegate in addition to MSO, unless MSO
had delegation of authority. (Reference Cost Transfer PPM)
G.
LABOR NOT ASSIGNED TO A BUDGET:
All salaries must be charged to either a budget number, vacation, sick leave, holiday, or
other approved administrative leave (jury duty/military leave).
Under no circumstances are employees without index numbers or approved leave status,
allowed to draw salary. Appropriate care must be taken to initiate projections and submit
lay-off notices when necessary.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 36
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
III.
ILLUSTRATION - MPL REGULAR HOUR RECHARGE RATE CALCULATION
Following are the steps involved with calculating the individual regular hour recharge rate.
1.
Calculate annual laboratory staff sick leave/jury duty/military leave downtime: (See
FIGURE 1)
a.
Identify laboratory sick leave earned & used for all staff employees recharged
during the prior FY.
b.
Assign cost to sick leave using the base rate in effect during the period the
employee earned/used the sick leave hours.
c.
Subtotal to summarize sick leave hours & costs for all laboratory recharged staff
employees.
d.
Identify any staff jury duty, or military leave down time hours & costs.
e.
Total staff sick leave and jury duty/milt. leave downtime hours & costs.
f.
Determine a downtime expense ratio by dividing the total costs of downtime used
by the costs of sick leave accrued. (See FIGURE 1)
g.
Use ratio calculation multiplied by 96 (12 x 8) to determine FY SL/JD/ML downtime
expense.
h.
Add in the carry forward credit/debit of sick leave/jury duty/military leave downtime
from the prior year. This number is used for the next FY downtime rate factor.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 37
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
FIGURE 1. Annual Laboratory Staff Sick Leave/Jury Duty/Military Leave Downtime
SICK LEAVE SUMMARY FOR THE PERIOD 7/1/XX - 6/30/XX
STAFF
BASE RATE+BENEFITS
NAME
HRS EARNED
$ EARNED
HRS
USED
$ USED
16.30
AnybodyA
staff
96.00
1564.80
58.00
945.40
21.60
AnybodyB
staff
96.00
2073.60
112.50
2430.00
14.21
AnybodyC
staff
96.00
1364.16
20.00
284.20
3920.00
82411.84
2806.38
56474.80
32.00
691.20
ETC
STAFF SICK LEAVE
DOWN TIME (SubTotal):
STAFF JURY DUTY
DOWN TIME:
21.60
AnybodyA
oct.nov.92
TOTAL STAFF SICK
LEAVE AND JURY DUTY
DOWN TIME
0.00
0.00
32.00
691.20
3920.00
82411.84
2838.38
57166.06
TOTAL FYXX STAFF DOWNTIME($57,166.06/82,411.84);
USED/EARNED$
0.69*96 = 66.59
(Add in military leave usage when applicable).
SICK LEAVE/JURY DUTY FACTOR TOTALS
TOTAL FYXX STAFF DOWNTIME AVERAGE:
USED/EARNED$
0.69*96
67 hrs
FYX SL FACTOR USED IN PRIOR FYXX RATES:
USED/EARNED$
0.49*96
47 hrs
SL CARRY FORWARD:
20 hrs
FYXX Sick leave
67 hrs
Add SL Carry Forward:
20 hrs
TOTAL ADJUSTED FY9X
STAFF DOWNTIME
AVERAGE:
87 hrs
*A*
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 38
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
2.
Calculate annual downtime factor (incorporates sick leave/jury/military leave down) (See
FIGURE 2)
a.
Separate downtime factor is required dependent on number of hours vacation
accrual each staff employee earns.
b.
Calculate # hours of vacation each employee will earn in the year taking into
account mid-year anniversaries that result in an increase in vacation accrual rates
and multiply by any University escalation rate "vr" for vacation "B"*
*There is currently an escalation rate of about 5%. This rate has varied over time
from 0-5%.
c.
Include 104 hrs/yr holidays "C"
d.
Add Sick leave/down hrs + vacation accrual hrs + holidays for = subtotal
DOWNTIME "D"
(A + B + C = D)
e.
Subtract the subtotal all down hrs "D" from total hrs in FY ="E"
f.
Divide Downtime Hrs (D) by Working Hrs (E) = F
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 39
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
FIGURE 2. Annual Downtime Factor
DOWNTIME FACTOR SUMMARY: 7/1/XX - 6/30/XX (FACTOR FOR FYXX RATES)
FYXX Working Hours: 2088
B+A+C = D
E = 2088-D
F = D/E
STAFF
B*
A
C
D
E
F
Vacation Earned
Hrs/Mo
Vac.Hrs
SL/down
hrs(AV)
Holidays
Subtotal
Hrs
Down
Wkg Hrs
Down hrs
10 X vr X 12 mo.
120
87
104
311
1777
0.17501
12 X vr X 12 mo.
144
87
104
335
1753
0.1911
14 X vr X 12 mo.
168
87
104
359
1729
0.20763
16 X vr X 12 mo.
192
87
104
383
1705
0.22463
Downtime
Factor
ACADEMIC
Vacation Earned
Hrs/Mo
Vac.Hrs
16 X vr X 12 mo.
192
SL/down
hrs(AV)
0
Holidays
104
Subtotal
Hrs
Down
Wkg Hrs
Down Hrs
296
1792
Downtime
Calc
0.16518
9 mo appointees, no vacation hours accrued, holiday hours are not applicable
GSR’s at 48.44%, no vacation hours accrued, holidays not applicable
* Note: Vac. Hrs include the escalation rate (vr) for vacation, if any. The illustration given
includes no escalation.
INDIVIDUALS WITH VACATION ACCRUAL RATE CHANGES MID-YEAR:
Vac.Earned
Hrs/mo
Vac.Hrs
NAME ,A .
Effective 11/16/XX increase from 10 hrs to 12 hr/mo earned
10 X vr X 5(5 mo)
50
12 X vr X 7 (7 mo)
84
NAME,A.
Total:
NAME, B.
10 X vr X 2 (2 mo)
134
SL/down
hrs(AV)
87
Holidays
104
Subtotal
Hrs
Down
325
Wkg HrsDown hrs
1763
Downtime
Calc
0.18434
Effective 9/12/XX increase from 10 hrs to 12 hr/mo earned
20
12 X vr X 10
(10 mo)
120
NAME,B. Total
140
87
104
331
1757
0.18839
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 40
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
3.
Calculate recharge rate (See FIGURE 3)
(July DOPE employee benefits/DOPE salary) = benefits factor
projected annual base X benefits factor X downtime factor = annual recharge rate
annual recharge rate/12 mos. =monthly recharge rate
monthly recharge rate/174 hrs. =hourly recharge rate
4.
Assign costs to projects per employee time record (See FIGURE 3)
employee recharge rate * hrs reported =labor cost to project
FIGURE 3. Recharge Rates Per Employee
CALCULATION OF MPL RECHARGE RATES: FYXX/XX
FYXX wk
hrs- 2088
Projected
Base/Yr
Ben.Fac
Mod
DownSL,H
ol,Vac
Rchg/Rate/YR
Rchg
Rate/MO
Recharge
Rate/HR
NAME
AnybodyA
ACAD
81621
1.0942
1.16518
104061.87
8617.82
49.84
AnybodyB
GSR
34896
1.0106
1.0000000
35265.90
2938.83
16.89
AnybodyC
HRLY
19692
1.0106
1.0000000
19900.74
1658.40
9.53
AnybodyD
10 HR
21400.68
1.1963
1.17501
30082.17
2506.85
14.41
AnybodyE
39154.80
1.2715
1.1856900
59029.97
4919.16
28.27
AnybodyF
33156
1.2506
1.2020700
49843.70
4153.64
23.87
AnybodyG
47239.08
1.2219
1.2189100
70357.23
5863.10
33.69
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 41
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
5.
Calculate Retroactive Salary Changes. (See FIGURE 4)
a.
Original amount is credited entirely
b.
corrected amount (total hours * new rate) is submitted.
FIGURE 4. Retroactive Changes
RECHG.
DEPT:
MARINE PHYSICAL LABORATORY RECHARGE
NAME:
DOE, JOHN
INDEX:
MPLXXXX
PERIOD:
8/1/XX - 9/20/XX
INFO:
To adjust recharge rate charged for period 8/1/XX - 8/20/XX to reflect
retroactive increase in salary base.
INDEX
RATE
HOURS
LABOR
ADMIN.SVC@27%
Used Rate
MPLXXXX
30.79
-120.00
-3,694.80
-997.60
Correct Rate
MPLXXXX
32.32
120.00
3,878.40
1,047.17
0.00
183.60
49.57
MPLXXXX
Approved:
____________________________________________________________
___
Name, MSO, Marine Physical Lab, Date
MPL CONTACT: For questions regarding this recharge contact Name, Extension
IV.
MPL OVERTIME HOURS RECHARGE RATE CALCULATION
Hourly base rate * (overtime benefits factor) = OT hourly recharge rate
Overtime hourly recharge rate * 1.5 =POT hourly recharge rate
Comp time saved is charged at regular hourly recharge rate (fully burdened) at the time it is
earned to the project on which hours are reported as employee receives full benefits when comp
time is taken.
V.
RECHARGE SALARY ESCALATION FACTOR
For proposal application, it is necessary to determine a factor for escalation of the Recharge
salary rate that combines the effects of both Benefit and Payroll salary escalation factors.
UCSD POLICY AND PROCEDURE MANUAL
SECTION 300-40 PAGE 1 SUPPLEMENT I
FINANCIAL ADMINISTRATION-GENERAL
Effective: 9/1/2004
Supersedes: 6/1/2002
Issuing Office: Business & Financial Svc, General Accounting Division
Supplement I
APPROVED DIFFERENTIAL RATES
(Effective as of September 1, 2004)
On-Campus Service Centers 45%
Off-Campus Service Centers 23%
Ship Use Service Centers 16%
Appendix C
COMMENTS TO THE AUXILIARY & SELF SUPPORTING ASSESSMENT TIGER TEAM
SUMMARY & RECOMMENDATIONS FROM THE DEPARTMENT OF
HOUSING*DINING*HOSPITALITY SERVICES FOR CONSIDERATION FOR INCLUSION
SOMEWHERE IN THE REPORT:
The Department wishes to acknowledge the work of the Tiger Team and specifically, the
team members from BFS who have done the majority of the leg work that generated the
information within the draft report.
The Department acknowledges that a timely completion of the initial review is important
however, we do want to note that, as has been cited by others, the Tiger Team has not had the
sufficient opportunity to review and discuss the recommendation that could/would be put
forward. HDH is concerned that all of the components of the recommendations have not been
completely reviewed by the Tiger Team. In addition to the Tiger Team review, HDH would
recommend that the Team needs to seek the involvement of the UC San Diego community under
the long standing concept of Shared Governance which would be typical of such a large scale
proposed change.
HDH would recommend that consideration be given to completing the assigned task but include a
recommendation that a subsequent, more in-depth review be initiated to assess the potential
impacts and potential solutions to mitigate overly negative impacts.
As HDH advised the Tiger Team early on, the housing and dining rates must be set and approved
by our student/faculty/staff advisory committees no later than March 31st each year so they can be
presented to the campus administration then to Office of the President and then to the Regents.
As such, after extensive review by our committees, the 2009-10 rates have been set with a 3%
increase and any change would have to go back to the committees and directly impact other
programs like Financial Aid as one example and expose the increases to many levels of scrutiny
and potentially other issues.
HDH recommends this should be captured somewhere within the draft of the report as an issue
that would need further review and perhaps alternatives.
Probably one of the most critical items for HDH within the draft recommendation is the
suggestion that exclusion of certain auxiliaries from this proposed policy. That recommendation
is unfair and inappropriate and unacceptable. A campus policy needs to reflect all impacted
groups top to bottom. It is HDH’s strongest recommendation that all identified auxiliaries/selfsupporting operations on the UC San Diego campus need to be included. Anything less is
unacceptable and in our opinion, negates the proposed policy and the implementation of a
permanent policy and this must be addressed in the draft report. HDH most strongly recommends
that the draft report recommend across the board application of any policy.
HDH also would most strongly recommend that a top priority be to implement necessary and
appropriate billing of costs to auxiliaries/self-supporting operations that have not been paying
their fair share. HDH believes that a critical component to this recommendation is to being
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
following the existing policies that have not been able to be implemented per the discussions in
the Tiger Team meetings. This will generate income that should have been coming in.
Conversely, HDH does not recommend going backwards to look at these operations for back
assessments. We believe they operated under what was believed to be the appropriate policies
that were being appropriately applied.
The Department of Housing*Dining*Hospitality Services has stated from the start of this process
that it is fully supportive of all auxiliaries/self-supporting operations paying their full costs and
that no costs of an auxiliary should fall on the campus to cover any and all costs which it incurs
doing business on the campus. In fact, as HDH shared, auxiliaries are charged to be completely
self-supporting. As such, we would like to recommend that this concept be firmly stated within
the goal(s) of the proposed policy.
HDH recommends that the tiger team efforts simply do not provide the level of review necessary
to look at the overall charge in detail, the background on how each auxiliary works, and
implications that a multi-million dollar annual assessment would have on the auxiliaries. HDH
feels strongly that there has not been insufficient review of the programs and impacts and there
has been insufficient time for auxiliaries to review the recommendations and analyze the potential
impacts. Additionally, only two auxiliaries have actually even seen the draft proposal with the
majority of auxiliaries still completely in the dark as to the recommendations which are
completely contrary to the concept of shared governance embraced by UC San Diego for decades.
HDH recommends that the draft be provided to all auxiliaries on the campus for review and
comment.
HDH recommends that the Tiger Team draft be used as solely as a working document and that a
clearly independent third party be brought in to review the recommendations, do the next level of
due diligence in review and address each of the recommendations. HDH recommends that the
campus administration should be asked to consider bringing in an outside consulting firm or
involved campus Internal Audit to provide a neutral review of the recommendations and the
process. Without a completely neutral party review, all recommendations could be considered
biased and done without consultation. In the opinion of HDH, that would be problematic for
upper management as the new assessment is brought forward and becomes more transparent.
Coupled with the above recommendation, the Tiger Team should provide an opportunity within
the recommendations for dissenting positions to be included. Clearly, there is not agreement on
the current draft version due to the fore-mentioned committee make-up and advancing a draft
without the opportunity for alternative views to be provided leaves significant opportunity for the
assumption that the TT is in agreement and supportive and for a lack of support from the
committee members when the information becomes public.
Alternatively, HDH would recommend that if the campus does not have the resources to bring in
a third party and Internal Audit is deemed not the correct review group, a new work group be
established with members of the Tiger Team as the core participants to continue the review
process.
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
The draft recommendation does not address the need to pull direct cost incurred non-auxiliary
services that are paid by a department directly by an auxiliary. For example, HDH has four (4)
co-located buyers that the department pays direct costs for. These costs will need to be wrapped
in the overall recovery charge and pulled out of HDH costs. Recommendation: Include verbiage
that clearly identifies exactly what is covered in the assessment in terms of services provided by
the campus and include verbiage that all current direct cost services that are within the campus
services will be eliminated and paid for under the assessment.
The draft recommendation does not address the need to compensate auxiliary’s services that have
non-auxiliary services using auxiliary resources. For example, HDH has four (4) co-located
buyers that the department provides private office space, file service, reception support, storage,
data support, etc none of which is paid for by BFS. HDH recommends inclusion of a statement
that affirms that any costs incurred by an Auxiliary that benefits a non-auxiliary service should be
paid for by the non-auxiliary either directly or within the proposed new assessment. In the
example cited above, clearly, BFS is benefiting at the expense of the auxiliary and these costs
should either be paid for by BFS to HDH or the staff moved to BFS space which is paid for by
the assessment.
Related to this example, HDH would recommend a chart be included that compares federal
dollars to auxiliaries/self-supporting operations and how they are assessed to cover things like
rent, utilities, and staff support and how that assessment parallels the proposed assessment to
Auxiliaries. For example, HDH reimburses parking for spaces it displaces due to new
construction per campus policy. Conversely, state funded buildings by state policy do not. How
does this fit within the overall concept of assessing auxiliaries/self-supporting operations at the
same level as federal funding?
The draft also does not address overhead passed on directly by campus entities applied above and
beyond the direct services. As an example, HDH pays 100% of the costs of the Resident
Security Officer (RSO) program. But in addition to the direct costs, pays for overhead costs
related to those services. Under this proposal, HDH would in essence be double assessed for this
overhead and as such, HDH would recommend that all overhead cost for these types of services
be recommended to be funded out of the new assessment otherwise, clearly, the auxiliary is
paying more than anyone else would.
The HDH Ten Year Financial Plan already calls for increases in excess of 5% annually to
generate the required income to fund the new housing being constructed in support of the campus
mission and the campus LRDP commitment. HDH would offer that it is unrealistic to expect
that the students, staff and faculty residing in existing and new housing will just accept the
required annual rate increases plus the new campus assessment.
As such, HDH would recommend that as part of the recommendation to initiate a more in-depth
review, within that context, time be allowed so Auxiliaries/Self-supporting activities can conduct
a review to assess the impacts of the new assessment and assess the viability of current new
projects going into construction as well as future planned development so that the campus can
consider these impacts as it considers the new assessment and that this should be captured in the
draft of the report.
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
Tied to the point above, by Office of the President Policy, The Department of HDH must
maintain a minimum of 1.25% debt service coverage at all times in its reserves. Failure to do so
would result in both current and future housing projects not being able to be advanced per UCOP
policy. The impact of this assessment on the debt service coverage could impact current projects
as well as future projects as the combination of all new costs may make achieving the required
coverage impossible for some period of time. HDH believes that an assessment of this magnitude
will have an adverse effect on HDH’s ability to contribute to our reserves in preparation for future
growth and related costs of initiating and supporting new housing projects on behalf of the
campus and will significantly reduce the ability of the campus to meet its Long Range
Development Plan (LRDP) which formally committed to housing 50% of all students on campus.
HDH recommends this should be captured in the draft of the report as a potential negative impact.
The impact of an increase to the administrative recharge rate at this point with rates set and
especially an increase to 6.50% in a single budget year and in this case, in a single budget year
where the budget is already set and like the rest of the campus, HDH is also facing across the
board labor increases and the opening of our new transfer housing could be potentially
devastating to the HDH program. Unlike the rest of the campus, approximately 475 of 550 career
staff are represented and have contracts which guarantee them increases compared to most
campus departments that have only clerical and many departments where the majority of their
staff are not represented. Additionally, the make-up of our custodial and dining staff tends to be
family orientated and generates benefit costs of close to 50%.
If an increase of this magnitude is recommended, HDH would request a concurrent
recommendation must be to implement the increase in a phased process over a period of time and
this should be captured in the draft of the report.
A recommendation needs to clearly compare what is included in federal assessment (assuming
that is the vehicle for establishing the 6.5% as far as costs that are returned to the campus
compared to what costs auxiliary returns. For example, as HDH shared with the team, when it
builds on the campus, it pays direct and indirect costs on a construction project and in turn, incurs
30 year debt service on those costs. This includes every component of bringing a building onto
the campus and includes all hard and soft costs. Additionally, as HDH shared, in nearly every
project, HDH provides funding outside of the scope of the project to value add to the UCSD
community such as continuing recycled water piping, adding capacity to the north campus pump
station for non-HDH buildings and providing funding for a campus open space as just three
examples. Any recommendation that advances needs to provide a vehicle to “credit” auxiliaries
for expenses they incur that benefit the campus above and beyond the needs of the auxiliary. In
these three examples alone, the cost exceeds $2M dollars of direct benefits to the campus that are
not required by the project in question. HDH recommends that this should be captured in the
draft of the report.
The recommendation needs to clearly address the direct costs and overhead absorbed by
Auxiliaries/self-supporting organizations related to the units covered by the Administrative
Recharge (Purchasing , Police, etc.) as well as the contributions made by HDH in support of the
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
campus mission --- bus service and sustainability to name a few. It is the position that IF HDH is
fully charged, all support services that are currently provided by the campus that are separately
funded by HDH need to be funded out of the new recharge level. HDH recommends this should
be captured within the draft of the report.
Although HDH is committed to supporting our staff and do not have any lay-offs of career staff
planned at this time, the Department has already implemented a number of cost cutting measures
with more planned for 09-10. An assessment would need be made of each new or replacement
position as to its criticality to the operation as well as those campus provided/HDH funded
positions that provide services to our department but to accomplish this, additional time is
required prior to the assessment being implemented. HDH recommends this should be captured
within the draft of the report as a issue to be more deeply reviewed later related to impacts. Need
clarification on this point.
Due to current economics, HDH has begun to reduce student worker positions as a cost reduction
effort. As an employer of over 700 students (one of the largest student employers in the UC
system), elimination of student worker positions directly impacts student financial need and
potentially makes UCSD less or even unaffordable. Additionally, fewer student jobs may
increase demand for more financial aid which is also under financial stress. HDH recommends
that this should be captured as a potential negative outcome within the draft of the report for
review later.
An assessment of this magnitude will have an adverse effect on HDH’s ability to provide ongoing renovations of existing buildings including planned and deferred maintenance and
improvements to fire-life-safety systems in student residences all of which must be funded
internally. This may put the University at an increased level of risk. HDH recommends that this
should be captured within the draft report as potential negative outcome and potential University
risk issue.
Any actions taken by HDH to mitigate the negative results of a substantial increase would
ultimately impact our residents. Once we have exhausted our cost cutting efforts which in some
cases are limited due to contractual requirements we have with our students, we have no way to
recoup cost but to increase housing and dining rates which in turn impacts the affordability of
access to the University. HDH recommend that this should be captured within the draft report as
a potential negative outcome.
As was noted in other comments, HDH strongly recommends that the report acknowledge that as
opposed to federal funding, all assessments applied to HDH are passed on in full to UC San
Diego students, staff and faculty and this directly impacts them and their day to day work and
living experience here. While this should not negate the overall requirement of full cost
recovery, HDH believes it needs to be considered particularly in the context of the current
financial crisis and the impact on our community.
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
Within the report, HDH recommends that it is clearly stated that the review and proposed changes
are in lieu of existing policy and practices and will replace the current administrative recharges
and associated costs and not be considered “on top of” the existing charges.
The proposed goal to improve the administrative recharge process by moving from the current
process which is based on services provided by Business Affairs to one that is based on campus
administrative costs attributed to Auxiliary/self-supporting activities. HDH would recommend
that it should be clearly stated in the report that the current BF&S recharges will be paid out of
the new assessment otherwise, a second layer of recharges could conceivably continue.
HDH fully supports that overhead rate be not limited to those auxiliary services located in
“campus space”. HDH agrees that facility costs are a direct charge for Auxiliary/self-supporting
activities. Whether they are located in campus space or not or whether they self fund all their
facility costs IF, this were to be recommended, it needs to be across the board on all.
The report addresses the location of an activity as only factor for our self-supporting units which
charge differential income. The differential income rate includes a facility component. Activities
operating out of campus space must charge the full differential income rate. HDH completely
disagrees with this and strongly recommends that the assessment be applied equally whether on
or off campus regardless under the notion that we are all UC San Diego and not separate entities.
Need to clarify that off campus activitites are directly charged for their space costs (leases).
On the question of leveraging the ICR process and how it is applied. Using the ICR methodology
in the development of an auxiliary overhead rate is one option. HDH would recommend that the
Tiger Team look at other methodologies those other similar size research institutions for best
practices purposes. HDH would suggest that using the existing process that Bill Brophy’s group
shared as the basic methodology for rate development is the best methodology or being
recommended because it’s already in place and that may be a function of the easiest way not
necessarily the best way. It was stated that Bill Brophy group’s agreed to use campus financial
data to develop a rate specific to the Auxiliary units and HDH would recommend that the Tiger
Team be provided this information to review once it’s finalized.
HDH agrees with the recommendation as to how the billing of overhead is accomplished. While
the concept of "piggy-backing" on the programming used to charge overhead on federal funds,
this may or may not translate well into the way auxiliaries/self-supporting operations do business.
HDH supports the automation the administrative recharge process but recommends that
additionally, it is critical that auxiliaries have the opportunity to review, comment and be part of
the report development.
HDH would also offer the following comments on the previously shared s reminder of the context
for the University’s core funded programs:
HDH acknowledges and agrees that the funding gap of approx $450M in state funding, consisting
of $115M in base budget cuts, $122M in unfunded student enrollment, and $213M in unfunded
costs for utilities, health benefits and other unavoidable inflationary costs is huge and probably
under-stated. HDH would recommend that it should be noted that Auxiliaries/self-supporting
operations are already impacted by this funding gap although perhaps in a different way. As
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
impacted state funded programs adjust, cuts come to auxiliaries/self-supporting operations that
depend on a share of that funding. The best example is campus catering where we have seen
decreased purchasing since November 2008 and continue to see declines.
HDH acknowledges and agrees that the comment that the campus will have restart of UCRP
retirement contributions and HDH with over 550 career staff faces one of the largest financial hits
of any program on the campus and HDH recommends that it should be noted as part of and not as
it is separate from the campus problem.
HDH recommends that the report should note that Auxiliaries and self-supporting operations
NEVER receive any funding for capital program and have to pay for all capital improvements on
their own. HDH recommends the report clearly state that auxiliaries and self-supporting
operations have no access to state funds for capital projects and are required to build and
maintenance our facilities with our own funding.
HDH recommends that it be noted that while the campus has been asked to plan for multi-year
state reductions that could be in range of 25%, auxiliaries and self-supporting operations have
been and will continue also participate in cost reductions as well as increases in costs. HDH
recommends that it be noted that auxiliaries and self-supporting operations are dealing with
similar reductions so as not to portray these organizations as not impacted by these cuts. That
would be an incorrect message to send in the report.
HDH recommends as noted, in addition to the above cuts, these are on top cuts only a few years
back where programs received directed state cuts, including 25% to professional schools, 25% to
research program, 20% to student services, multi-million dollar reductions to institutional
programs as well as other undesignated reductions, these same reductions impacted auxiliaries
and self-supporting as mentioned in the previous bullet and should be noted so as not to portray
the organizations as exempt.
HDH recommends as noted, that the campus had significant double-digit fee increases for several
consecutive years as noted but HDH recommends that it is unrealistic to continue to think and
develop practices to fund unfunded mandates and the ability of the University to do its business in
the face of draconian cuts is simply not reasonable. HDH recommends that a statement be
included that makes it clear that other sources of new income need to be identified that don’t
simply move the costs from the same student, staff and faculty base. This has not worked and
will not work in the future.
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
Specific Comments by Department of Housing*Dining*Hospitality on Auxiliary & Self-Supporting
Assessment Tiger Team Summary and Recommendations –
Section II - Page 1 or 7
The statement “It was formed to review current cost recovery on “sales and services to outside users’ to
ensure institutional costs are recovered and in alignment with benefits receives – without institutional
subsidy”
HDH would offer that the statement is too broad in that the committee only reviewed campus
entities and made no review of non-campus entities such a 3rd party operations at the Price
Center. It could be argued that these entities receive the same or even more benefits from being
on the campus in that they for all intensive purposes serve exactly the same as a on campus
auxiliary or self-supporting operation but don’t have to use required campus services or pay
required campus wages and benefits. In essence, by definition, these are in fact the “outside
users” and the on campus operations are actually internal users in that we are UC San Diego
employees and service primarily UC San Diego students, staff and faculty.
HDH would offer that the wording could be re-worked to “sales and services by UC San Diego
Auxiliaries and Self-Supporting operations…”
HDH would offer that in making this statement, there needs to be another statement that clearly
states that “outside users such as third party businesses on the campus were not reviewed and the
campus cost recovery model may or may not ensure that institutional costs are recovered and in
alignment with benefits received.
In the second paragraph, as noted in my previously submitted list of general comments, HDH would offer
that to identify on-going cost challenges faced by the campus and not acknowledge that UC San Diego
auxiliaries and self-supporting operations don’t face all the same challenges could give the appearance
that they don’t and this is incorrect. In fact, to the previous point, the only businesses on the campus that
are exempt are third party operations. HDH would suggest adding an admission that clearly notes that
the negative financial impacts hit all parts of the organization.
In the third paragraph, HDH would offer that just showing “revenue” of auxiliaries and self-supporting
operations only shows half the picture and if we are going to reference “revenue”, we should also
represent “expense”/
In the third paragraph, HDH would offer that the use of the term “anecdotal” may not be the best
descriptor and making the broad statements that auxiliaries and self-supporting operations at UC San
Diego are “low” relative to other UC schools seems incongruent with the overall charge. HDH would
offer that the true charge should be to look and ensure that auxiliaries and self-supporting operations are
paying their true and fair share and not receiving any benefits from the campus without paying for them.
To compare UC San Diego to other campuses as was stated gives the impression that we are not paying
our full share and those others are when in fact, it is possible that other campuses are inaccurately and
unfairly assessing auxiliaries and self-supporting operations exorbitantly. HDH would suggest that no
effort was made to compare other campuses to UC San Diego and whether or not they were correct
assessments. In fact, HDH is aware of one assessment that was done by UCLA that was in fact, not
correct, and HDH understands that all other campuses were banned from deploying this methodology.
The point being, just because they are able to assess doesn’t mean that it is a correct cost recovery
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
methodology and HDH would recommend that the report either acknowledge that no review of other
campuses methods compared to UC San Diego was made and that other campus may or may not be
assessing correctly.
HDH would also offer that within this document, as mentioned in the previous general comments, a
clearer definition of the goals of the Tiger team should be stated and those should speak to paying our fair
share and not receiving any subsidy. The third paragraph clearly sets the tone that we are not and others
are.
Page 2
On bullet, “examine alternatives….”, again, as one reads this, it makes the statement for “broadening the
use of funds” which HDH would offer appears to set a direction of charging auxiliaries and self
supporting operations as much as possible and then directing those funds to alternative uses. The core
value here must be ensuring that auxiliaries and self-supporting operations are not receiving campus
subsidy and paying their full costs and assuming that we are, those funds need to go back to the programs
that are providing those services and not be re-directed to other uses. HDH would offer that this bullet be
eliminated.
Change bullet “minimize negative consequences to campus core mission” to “reduce ….” - Using the
term “minimize” leads one to think about getting as much out of auxiliaries and self-supporting
operations as one can versus “reduce” which speaks to contributing toward the large financial issue. This
bullet is another example of directing the reader towards getting any dollars as they can extract versus
simply ensuring that auxiliaries and self-supporting operations are paying the full costs that they are
suppose to pay.
Section III
Paragraph 1 - HDH would offer that the current practice as described is correct and HDH would offer
that the practice has been be in place for decades without issue and that this should be noted in that
paragraph. Had all the economic chaos not occurred, there would have been no tiger team or review of
the process.
No comments on this section
Under Findings...
First bullet should be rewritten to say “Per current campus policy/procedure/practice, the administrative
recharge…. As it is written, it generates a negative feeling as though there were something nefarious at
play when in fact, it has been this way for decades and that needs to be stated in a more neutral way.
Second bullet should be restated “The current calculation method provides a more exact methodology but
the effort involved in maintaining and updating the calculations is labor intensive and alternative methods
should be examined. HDH would offer that there are electronic solutions that could have been
implemented to avoid the labor intensiveness but none have been reviewed.
Third bullet seems to reflect negatively on the operations that are responsible for this and HDH would
offer that perhaps this could be re-worded so as to lessen assignment of responsibility for not billing per
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
policy. Tied to this, HDH would offer that it should be noted that if the time had been available,
auxiliaries and self-supporting operations would have been paying their fair share.
Fourth bullet is fine but then HDH would offer that a bullet be added following that bullet that clearly
states some auxiliaries and self-supporting programs have situations similar to the Med Center where
rates for certain campus services have been reduced or eliminated because the auxiliary or self-supporting
entity is handling them either partially or completely
No other comments on bullets on page 3
No comments on Matrix section
No comments on Auxiliary section
No comments on Facilities and Administrative costs other than HDH disagrees with the 6.5% as being
able to be tied to establishing that auxiliaries and self-supporting operations are paying their fair share and
not receiving any subsidy from the campus. HDH would offer that establishing single number without
testing it relative to the services received by these organizations and the cost paid gives the appearance of
moving from an assessment to a tax.
Under recommendations
The second recommendation to provide the Medical Center and the Medical compensation activities with
a specific overhead rate would give the appearance of preferential treatment and if this is a
recommendation which will be offered, it should be offered to all auxiliaries and self-supporting
operations for purposes of equity. This of course would mean potentially negotiating rates with one and
all. HDH would offer the core value is to assess the operation, whatever it is and ensure they are paying
their costs rather than adjusting the value for special interests.
Under the third recommendation, HDH supports standardization and automation but does not agree with
monthly billing. HDH would offer quarterly billing would be less labor and in the case of HDH, the
summer months are low income periods and having billings coming in when income is low, places unnecessary pressure on the department whereas quarterly allows us to have the fall income stream in hand.
On the fifth recommendation, HDH would offer that using a Federal rate has nothing to do with campus
auxiliaries and self-supporting operations. HDH would offer that the Federal government is hardly the
shining example of best practices. The rate should be based on ensuring that the auxiliary or self
supporting operation is paying its fair share and not receiving campus services for free.
HDH recommends that a ninth recommendation be added which calls for another group to take this report
and assess the direct impacts to the programs. HDH would offer that there had been no review of the
consequences for the campus if these recommendations were advanced and this could potentially have
serious consequences for both the campus and the auxiliaries and self-supporting operations.
No other comments
Thank you for the opportunity to comment
Source: Housing, Dining & Hospitality Draft Comments
Appendix C
VCHS questions and comments arising from draft of ASSA draft recommendations:
Need to analyze and vet outcomes of proposed changes.
There has been no analysis of the probable impact on activities of the proposed
changes in overhead. If the result of some of the changes is to put certain activities
out of business, the campus will not have gained economically, and the PI may have
lost important connections to future research funding, the ability to provide bridge or
full time funding for research personnel, etc. In addition, some assumptions about the
proper classification of activities may overestimate the revenue gains to be made. For
example, on page 4 it is stated that Psychiatric Clinical Services does not appear to be
an auxiliary activity and “should be subject to the higher differential income rate”
(DI). However, PCS is a quasi Medical Group activity exempt from DI (PPM30040).
Data will need to be gathered and the results vetted before analyses can be performed
on the likely impact of a change of overhead structure on these activities. All of this
should be done before final recommendations are made. At this point the committee
should simply recommend that the analyses be conducted as a necessary step to
identifying which areas are not currently paying an “appropriate” amount.
The committee should also define “appropriate.” Early on it was defined as paying for
the activity’s resource usage, which itself is a higher standard than that imposed on
the federal government with its lower, negotiated rate. However, recommendation
#6 on p. 6 states that the distribution of differential income should be re-examined:
“Allocate funds in a way that better aligns with how the reimbursement of campus
overhead costs [sic] or relative to other higher priority uses.” This statement seems to
abandon the notion of proportionality, and simply focuses on the need of “higher
priority uses” for which no definitional guidelines are provided. It also gives a “blank
check” for any redistribution of revenue between campus and VC area. Any such
recommendation should have a basis in principle, be specific as to the level of
redistribution, and evaluate the impact on those losing the income.
Need for greater consideration of appropriate overhead methodologies and their
impact.
The draft proposes elimination of the current Administrative Recharge and its
replacement with an Auxiliary overhead rate based on the methodology and data
utilized to develop research overhead rates. That should be one alternative
considered among others, for example: what is the dollar impact from the already
made correction to utilize a % rather than a fixed dollar in administration of the
recharge? What is the impact of the calculated vs. the negotiated rate if the
research model is utilized? And importantly, what cost cutting measures is
campus undertaking to reduce the cost of provision of central services at a time of
dramatic automation and decentralization of activities?
Source: VC Health Sciences Draft Comments
Appendix C
Expense vs. income basis
Administrative recharges have typically been based on income and not expenses
as proposed here. Imposing the overhead on expenses is difficult to implement
for activities that have a mix of internal and external customers since expenses as
reflected on the ledger are not clearly identified as to category of client. In
addition, if overhead is applied to income, it is easier to add the overhead to the
fee charged. If the activity is temporarily struggling and goes into deficit,
expenses will exceed revenue and this calculation will further jeopardize
activity’s recovery.
Source: VC Health Sciences Draft Comments
Appendix C
To: Sylvia Lepe AVC, Campus Budget Office, 9500 Gilman Drive # 0936
La Jolla, CA 92093-0936
cc Mark Cunningham; Mercedes Munoz; Steve Relyea; D. McGraw; Ron Espiritu; Nicholas Webster,
Deborah Seidle, J Milner-Mares; Bill Brophy; Julie Staffiero, Clayton Egan, Mercedes Munoz
From: Brian d’Autremont, Director, Transportation Services, 9500 Gilman Drive Building D
Date: April 22, 2009
Re: Tiger Team assessment response
I have greatly appreciated being a part of the committee, but feel strongly the report as
prepared is not a shared effort, and does not fully recognize the implications of the
proposed assessments.
The recommendations were not drawn from a consensus of the group. It has been my
experience that such a group traditionally discusses and forms a report by consensus, and
votes on recommendations. Further, I see incomplete representation of the many
discussions and factors involved and presented. It seems to me as if the information
provided to the committee has been ignored, which does a disservice to our goals and the
equity we seek to sponsor at UC San Diego.
These are the Transportation Services concerns.
The committee did not review and decide how to consider the enormous amount
of support provided currently. Included in these costs are: UCPD, Disability
programs, HR IT and Facilities Maintenance.
In example of additional added value we provide to the University, the $4+
Million of shuttle operations we provide is not primarily parking related. Yet it
is a sustainable benefit to the University; carrying over 3 Million customers per
year. This should be recognized. Is it your suggestion we cut service? Has this
been vetted with the appropriate committees?
Little regard was paid to the internal A&PS assessments, which cut down the
overall costs to the University, and meet specialized needs of Business units.
Most important, 85% support for public transportation is placed on this
department. The report gives that short shrift.
The report as written considers the income of this department as from outside
sources. This is disingenuous, as over 97% of the income comes from UCSD
Faculty Staff and Students.
Should extra assessments be levied against Transportation, the pass-along to the
Faculty Staff and students, during this time of financial stress, will be detrimental
to the University Mission.
Finally
UC San Diego is a world leader in Transportation Demand Management, as
exemplified by award of the Clinton Global Initiative, SANDEE and SANDAG
awards. Additional charges to our budget would have the effect of lowering
service levels, causing a drop in the effectiveness of our world class
sustainability practices.
Without inclusion of these factors, and a shared governance approach being followed, I cannot
add my name to the report, except as a dissenting member of the committee.
Source: Transportation Services Draft Comments